Bitcoin has found itself in a tight trading range over the past two weeks, fluctuating between $60,000 and $72,000. Currently, the cryptocurrency is trading at approximately $67,800 and has shown slight short-term upward momentum. However, the broader market sentiment remains exceedingly fearful, even as institutional holders continue to adopt a “buy more” strategy amid the prevailing volatility.
Reports from AMBCrypto suggest that traders aiming to go long could face potential challenges, including a long squeeze. This concern arises from the existence of leveraged long positions and an increasing long/short ratio during this consolidation phase. Such market dynamics could lead to a situation of maximum stress, which is often seen as necessary for establishing a long-term market bottom.
Notably, Bitcoin has evaded a ‘full cleansing’ over the last three years, with the Sales Pressure signal absent throughout this time. Analysts have pointed out that Bitcoin’s price has consistently remained above the on-chain realized price of $54,800—marking 1,133 days without strong network stress as observed by crypto analyst Axel Adler Jr. He emphasized three crucial network cost basis levels to monitor: the short-term holder realized price at $91,400, the overall realized price at $54,800, and the long-term holder realized price at $38,700.
Understanding the cyclical risk for holders is critical, with the $54,800 level being particularly noteworthy. A drop below this price would result in an average loss for positions held, which could trigger the sales pressure indicator and usher in a phase of maximum network stress. Even though the current market environment has been bearish, long-term holders still find themselves in a profit position, indicating that the maximum stress phase has yet to materialize.
In a recent analysis shared on social media platform X, analyst Darkfost noted a positive shift in monthly cumulative Bitcoin demand after three consecutive months of sluggish activity. This uptick could signal an early indication of structural accumulation that may help absorb new supply, despite the long-term bearish outlook. Continuous positive demand over the coming weeks would further signal a potential recovery for Bitcoin.
In summary, the realized price of $54,800 serves as a vital structural buffer, delineating bearish conditions from phases of maximum stress for holders. The recent uptick in demand presents a flicker of hope for the market, providing early signs of potential recovery amidst an otherwise challenging environment.
