Key Market Indicators
- •Bitcoin has fallen below the $100,000 mark and may retest its yearly open at $93,500 due to weakening momentum.
- •The Coinbase Premium Index has reached a seven-month low, indicating strong selling pressure from US spot Bitcoin investors.
- •Short-term holders are accumulating Bitcoin, while long-term holders are continuing to take profits.
Current Market Performance
Bitcoin's (BTC) recent downward trend continued into Friday's trading session, with the cryptocurrency once again falling below the $100,000 threshold. BTC could potentially revisit its prior low of $98,200, a level established on June 23.
On November 6, the Bitcoin Coinbase Premium Index, a metric that measures the price difference between Bitcoin on Coinbase and other global exchanges such as Binance, declined to its lowest point since April 11. A negative premium indicates that Bitcoin is trading at a discount on Coinbase, which often reflects increased selling pressure from US-based investors and outflows related to ETFs. Historically, prolonged periods of negative premiums have been associated with short-term price weakness.
Crypto trader Daan Trades observed that such phases are not uncommon during broader downtrends. The analyst explained that the discount typically emerges when the market experiences concentrated spot selling originating from Coinbase-related flows. While this is not inherently a bullish sign, Daan added that the market rarely bottoms out locally without first exhibiting such a discount.
The market rarely bottoms locally without first seeing such a discount.
In essence, a sustained price recovery following this discount could suggest that the market is absorbing sell pressure, potentially marking the initial stages of accumulation.
On-Chain Data Insights
On-chain data provides further support for this mixed market sentiment. The short-term holder (STH) net position change has recently reached a yearly high, indicating that traders who typically hold coins for less than 155 days are increasing their holdings despite the recent pullback. In contrast, the long-term holder (LTH) net position change is approaching yearly lows, suggesting that seasoned investors are continuing to take profits. This divergence implies that while new buyers are entering the market, the absorption of selling pressure is not yet sufficient to establish a definitive bottom range.
Technical Outlook and Potential Price Movements
From a technical perspective, Bitcoin's short-term charts, including the one-hour and four-hour timeframes, do not currently display signs of a bullish reversal pattern. The recent price increase was largely attributed to short covering rather than genuine buying pressure. However, over the past few hours, BTC open interest has shown a steady rise, accompanied by elevated funding rates, which suggests that traders may be opening new long positions.
Nevertheless, unless BTC reclaims the $104,000 level as firm support, a more significant pullback towards $95,000 could occur in the coming week, potentially testing the yearly open near $93,500. Such a movement might serve to liquidate remaining long positions before setting the stage for a potential rebound driven by short liquidations.