Last week, panic selling by the market due to concerns over the German government and Mt. Gox creditors led to heavy downward pressure on Bitcoin prices, breaking below the 120-day price range and temporarily falling to $53,219.
However, according to analysts at Bitfinex, derivative market indicators suggest that the price of Bitcoin may have started to stabilize and that the asset may have reached a local low point. According to The Block, Bitfinex analysts said to the media:
Bitfinex analysts believe that the gap between implied volatility and historical volatility has narrowed by nearly 90%, indicating that traders expect Bitcoin prices to remain within a certain range and stabilize. On the other hand, although open interest options contracts show a lack of confidence in both long and short directions, selling pressure from short-term holders may be nearing its end.
The Bitfinex analyst said, “While we see long-term Bitcoin holders continue to realize significant profits in their spot positions, selling pressure from short-term holders may be nearing its end. We note that the short-term holder’s spent output profit ratio (SOPR) is 0.97, indicating that this group is currently selling at a loss. Historically, when this situation occurs and selling pressure eases, prices tend to rebound.”
About GT Radar
GT Radar focuses on building a long-term, stable growth quantitative investment portfolio, with over 10 years of experience in stock market and cryptocurrency quantitative trading. The trading system incorporates over 150 strategies, aiming to provide high adaptability and flexibility, ensuring profits are obtained from the market in the most robust manner.
Join GT Radar discussion group
Weekly market analysis report