Bitcoin [BTC] fell below the fair value gap at $106.5k – A sign that its short-term bias was bearish at press time. In fact, it appeared likely to fall towards $102.5k and as deep as $100k next. A breakdown below $100k may be unlikely though.
Geopolitical tensions and the possibility of war are growing by the day as nations exchange missiles in the Middle East. Inflation has slowed down in the U.S, but it is not yet at the Federal Reserve’s target rate. Tariffs and economic uncertainty have also been looming. These factors have led investors to flee towards gold as a store of value.
Despite the FUD in traditional markets, Bitcoin has remained strong above the $100k-mark. This means that investors are increasingly treating the crypto asset as a store of value.
In a post on CryptoQuant Insights, user CryptoMe observed that the change in netflows has not been high. There has been no significant positive change in the netflows, which meant no high inflows as holders realized profits and exited the market.
This lack of selling, for now, may be a positive sign that investors might not be panicking.
The Open Interest on centralized exchanges did not show a large drop. The correction from $110k to $105k saw long liquidations, which meant long positions were forcibly closed, explaining a good chunk of the OI drop.
However, it was not a large-scale sell-off. High OI levels meant speculative interest has been notably high, despite the fear and uncertainty in the market. It may be another sign that investors are in wait-and-watch mode right now.
In a post on X, crypto analyst Axel Adler Jr noted that the press time reading was at 46%, just below the neutral threshold of 50%.
To resume the uptrend it saw previously in June, the index must climb beyond 60%-65%. This would need sustained demand and capital influx.
The 1-day chart revealed that a bearish bias was warranted for Bitcoin in the coming days. There was a long southward wick last Friday, whose low at $102.6k could be revisited soon. The CMF revealed that selling pressure was dominant, with the Awesome Oscillator suggesting that downward momentum was prevalent.
Overall, market participants should expect short-term volatility. However, in the face of FUD, the strength of the holders has been encouraging. It might be smart for retail investors to adopt this wait-and-watch stance as well.
