This article is also available in Spanish.
Bitcoin (BTC) is currently just under $88,000. This is down significantly from an all-time high of $109,000 earlier this year. Over the past month, major cryptocurrencies have steadily declined, slipping by nearly 15%, showing limited signs of rebound.
While many investors have been interested in this bearish trend, one crypto analyst, Bilalhuseynov, recently shared his perspective on the current state of Bitcoin using retail investors’ demand (RID) indicators.
Related readings
Bitcoin retail investors demands on Crossroads
Bilalhuseynov’s analysis focuses on retail investors’ demand (RID). This metric often provides insight into potential price movements by measuring retail interests and activities in Bitcoin.
According to analysts, demand for retail investors has recently faced resistance near the neutral zone of around 0%. In mid-February, the RID indicators tried to exceed this threshold, but due to a shortage, Bitcoin fell to the current level of $88,000.
However, despite this set-off, there are positive signs. Analysts noted that Lid is beginning to be featured again. This is a pattern reminiscent of when Bitcoin saw a quick recovery after a similar dip in June 2021.
However, for the metric to truly show a positive turn, it must rise above the 0% neutral zone, indicating a potential change in market sentiment. Bilalhuseynov provides a more detailed explanation of how RID metrics can guide long-term analysis. He identifies three important levels:
•Negative (-15%): A strong indicator for monitoring purchase opportunities.
•Neutral (0%): Indication that the market may be preparing for movement in either direction.
•Positive (15%): It suggests that Bitcoin prices have entered the “premium area” that is often seen in bull markets.
Analysts highlighted that in October 2024 surges above the 0% neutral zone coincided with Bitcoin’s all-time high.
Conversely, it was soaked back to 0% in late 2024, indicating the onset of the bearish phase. Currently, RID is at a critical time, and changes in retail demand could affect Bitcoin’s trajectory in the coming months.
Short-term indicators point to potential rebound opportunities
Meanwhile, other analysts identify short-term purchase opportunities based on a variety of metrics. Another crypto analyst, Yonsei Dent, pointed out the used output profit margin (SOPR) of Bitcoin Short-Term Holders (STH).
This metric, which measures whether short-term holders are selling profits or losses, has recently dropped to a level that indicates historically sold status.
According to Dent, applying the Bollinger band to STH-SOPR helped to identify extreme deviations, with current data showing similar patterns to previous market bottoms.
Dent noted that the key negative side deviations of each of the STH-SOPR followed by short-term rebounds ranging from +8% to +42%, even during the Bear Market situation.
Related readings
This historical context suggests that Bitcoin may be approaching a critical period. If the pattern applies, a short-term price recovery could be on the horizon, providing opportunities for short-term traders.
Special images created with Dall-E, TradingView chart
Discover more from Earlybirds Invest
Subscribe to get the latest posts sent to your email.
