Bitcoin Holds Steady Below $95K as Market Eyes Potential Rebound Amid Economic Uncertainty
Bitcoin (BTC) was trading just under $95,000 on Friday morning, a slight recovery after a sharp drop that saw the cryptocurrency dip near $90,000 late Thursday. The drop, marking a 10% correction from the week’s high of over $120,000, has left market participants cautious, but on-chain data and investor sentiment suggest that current price levels may present a strategic buying opportunity.
On-Chain Indicators Signal Market Opportunity
Key on-chain metrics suggest that Bitcoin is approaching a critical point. The Spent Output Profit Ratio (SOPR) has recently risen to 0.987, reflecting a situation where short-term holders are selling at a loss. Historically, when SOPR dips below 1, it has often signaled market bottoms and potential for price recoveries, suggesting that now may be a good time for investors to consider entering the market.
In addition, indicators like Market Value to Realized Value (MVRV) and the Puell Multiple remain supportive of the view that Bitcoin has not yet reached its peak. CryptoQuant analyst Mac_D emphasized that when short-term investors experience losses, it can create accumulation opportunities for long-term buyers.
“As short-term investors face losses, the opportunity for accumulation arises for those who see the value in Bitcoin’s long-term potential,” said Mac_D. “We may be in the midst of a temporary correction rather than a trend reversal.”
Understanding SOPR and MVRV Metrics
The SOPR metric tracks the profit or loss of Bitcoin spent in transactions. When this value falls below 1, it indicates that a significant portion of the market is selling at a loss, which often correlates with market bottoms and subsequent price rebounds.
Meanwhile, the MVRV ratio compares Bitcoin’s total market value to its realized value. A lower MVRV suggests that Bitcoin is undervalued relative to its historical price movements, typically pointing to a favorable buying opportunity.
Market Volatility Linked to Economic Data
The recent price dip was largely driven by fresh economic data, particularly the Institute for Supply Management’s (ISM) report on U.S. services. The report revealed a sharp rise in prices paid, fueling concerns that the Federal Reserve might implement more aggressive interest rate hikes. This uncertainty sparked a selloff across risk assets, including Bitcoin.
Investors are now looking to Friday’s U.S. non-farm payrolls (NFP) report for further direction. A stronger-than-expected jobs report could signal a stronger economy, which would likely result in continued Fed tightening, potentially causing further volatility for Bitcoin and other risk assets.
Is Bitcoin on the Verge of a Rebound?
Despite the recent pullback, many analysts believe that Bitcoin is likely to recover in the near term. Historically, price corrections such as the one observed this week have often been followed by a resumption of the bullish trend.
The combination of strong on-chain indicators and a market that remains fundamentally bullish suggests that the current dip could present an opportunity for long-term investors to accumulate Bitcoin at discounted prices. With key levels like $95,000 holding steady, Bitcoin’s potential for continued growth remains intact.
