Bitcoin is currently trading around $123,000 following an 8% flush in leverage, indicating the establishment of a potential new value area as it gears up for a possible rally towards $150,000 in the fourth quarter.
Key Points:
- Bitcoin has maintained stable trading between $120,000 and $125,000 after a recent and orderly deleveraging across the futures market.
- Increased spot demand and reduced open interest reflect heightened buyer confidence.
- The MVRV ratio indicates a possible upside of 15% to 25%, potentially reaching between $140,000 and $150,000 by the end of Q4.
Bitcoin (BTC) is navigating a range around $120,000, showing signs of a key demand zone emerging for traders shortly.
Market insights from analyst Skew suggest a rebound at approximately $120,000 indicates strong buy interest. Spot data from Binance highlights a surge in cumulative volume delta (CVD) around this price, affirming renewed purchasing activity.
Bitcoin spot and futures activity analysis by Skew. Source: X
Simultaneously, futures markets displayed bid clusters near this level, with a drop in open interest signaling closure of short positions as prices began to rise.
Onchain metrics corroborate this consolidation viewpoint. Analyst Maartunn noted a nearly even division among short-term holders between profits and losses, pointing to 24,100 BTC sent to exchanges at a profit compared to 19,700 BTC at a loss, indicating a slight bias towards profitability.
Bitcoin short-term holder P&L to exchanges. Source: Maartunn/X
Furthermore, Binance’s data highlights a significant leverage reset accompanying the recent market withdrawal, with Bitcoin’s open interest declining from a peak of $15.07 billion to $13.88 billion, a drop of 7.9% over three days.
This leverage contraction typically suggests cautious repositioning rather than a complete exit, which may facilitate a more durable advance as new investment flows back into the market.
MVRV Analysis Signals Robust Q4 Prospects
While the immediate trend suggests consolidation, analysts maintain an optimistic outlook for Bitcoin through the year’s end. Market strategist Timo Oinonen emphasized the MVRV (Market Value to Realized Value) ratio as a crucial gauge for potential growth.
The MVRV metric evaluates Bitcoin’s current market cap against its realized cap, effectively signaling whether the asset is overvalued or undervalued concerning its holders’ purchase costs.
Oinonen indicates that Bitcoin’s MVRV presently forecasts a foundational scenario where prices may ascend by 15% to 25% towards $140,000–$150,000 by Q4’s conclusion, buoyed by prolonged holder accumulation and robust short-term cost bases.
Bitcoin MVRV analysis by Timo Oinonen. Source: CryptoQuant
A more favorable scenario, where the MVRV exceeds 4.0, akin to the 2021 market cycle, could propel BTC towards $170,000 to $200,000 amid renewed market enthusiasm and a prospective post-halving supply squeeze.
Investment Disclaimer
The information provided does not constitute investment advice or recommendations. All trading actions involve risk, and readers should perform their research prior to making any financial decisions.
