Bitcoin Dips After ATH – Is Another Rally in Sight?
2025-01-21
Category: None

Bitcoin (BTC) has seen a 2.42% decline from its all-time high of $109,114.8, set on January 20, to $101,308.55. While the pullback may seem concerning, analysts suggest this could be a healthy retracement, setting the stage for the next rally.

Market data from Glassnode shows Bitcoin’s Long-Term Holder Net Unrealized Profit/Loss (LTH-NUPL) has surpassed 0.75, entering the “Euphoria/Greed” phase. Historically, this level often signals a local market top as traders lock in profits. However, short-term holders (STHs) are maintaining positive sentiment.

The Short-Term Holder Market Value to Realized Value (STH-MVRV) ratio stands at 1.16, above its 1-year trendline. This indicates that STHs are realizing a 16% profit on their cost basis, reflecting strong buying activity and potential for upward momentum.

Hyblock Capital’s liquidation heatmap highlights two key price magnets: $106,000 on the upside and $99,200 on the downside. BTC could briefly dip to $99,200 before rebounding toward $106,000, paving the way for new highs.

Adding to the bullish narrative, CryptoQuant reports a three-year outflow of 1 million BTC from exchanges, reducing the supply available for trading. This trend could create a supply squeeze, decreasing selling pressure and driving prices higher.

BTC’s current retracement may simply be a pit stop before another surge. With market fundamentals pointing to strong demand and reduced supply, the long-term outlook for Bitcoin remains optimistic.