Bitcoin is showing signs that it may still face correction as analysts from Santiment, Brian Quinlivan and Maksim Balashevich, suggest the cryptocurrency could revisit the $74,000 to $75,000 range before establishing a definitive bottom. In the latest episode of “This Week in Crypto,” the experts highlighted several key indicators such as declining on-chain activity, changing sentiment, and unresolved behaviors among retail investors.
Currently, Bitcoin has decreased nearly 5% over the past week, while Ethereum has dropped almost 9%. This downturn reflects the broader market”s reaction following a classic buy-the-rumor, sell-the-news scenario linked to the recent CPI report. Quinlivan pointed out that retail engagement is currently higher than optimal for this phase of the market cycle. Recurrent rebounds toward $90,000 and bursts of optimistic commentary have stifled the level of fear and impatience typically seen prior to a solid bottom being formed.
Additionally, Bitcoin”s transaction volume has consistently declined since a spike in November. The number of daily active addresses and overall circulation has reached some of its lowest levels in the last quarter. Nevertheless, network growth remains stable, indicating that wallet creation continues despite the drop in activity levels. The 30-day MVRV is nearing a neutral position, while the 365-day MVRV reflects a negative trend. Historically, these patterns suggest a phase of accumulation.
Balashevich also noted that healthier recoveries are usually observed when short positions are more dominant, which can lead to sharp rebounds in price. At present, whale activity has cooled down, with fewer significant transfers taking place. However, a recent uptick in transactions exceeding $1 million suggests that large players are selectively engaging with the market.
One concerning trend is the rise in Bitcoin supply on exchanges. Since December 9, approximately 17,700 BTC have been returned to exchanges, pushing the total exchange supply from 6.03% to 6.12%. Historical data indicates that similar increases have often coincided with local tops or deeper pullbacks, although there are exceptions.
Ultimately, Balashevich posits that a retest of the $74,000 area could incite a wave of panic, potentially resetting market sentiment. Until that scenario unfolds, Bitcoin”s trajectory may involve a brief upward movement followed by another corrective phase before a more convincing recovery can commence.
