- Bitcoin was down by more than 2.5% in the last seven days.
- Metrics suggested that selling pressure on BTC was high.
Bitcoin [BTC] failed to register gains over the last few weeks as its value continued to drop. The price of the king coin, after touching $48,000 on the 11th of January, fell under the $42,000 mark at press time.
This price drop caused a major change in one of BTC’s key metrics.
Further price drop incoming?
Last week was not the best for Bitcoin, as its value plummeted by more than 2.5% in seven days. According to CoinMarketCap, at the time of writing, BTC was trading at $41,595.04 with a market capitalization of over $815 billion.
BTC’s trading volume also dropped, reflecting less interest from investors while trading the coin. Meanwhile, Bitcoin’s Fear and Greed Index turned natural, as it had a value of 52.
Bitcoin Fear and Greed Index is 52. Neutral
Current price: $41,713 pic.twitter.com/j8Wmxl3uH1— Bitcoin Fear and Greed Index (@BitcoinFear) January 20, 2024
The Fear and Greed Index is a tool for gauging the general mood of the cryptocurrency market, using social signals and market patterns. Whenever the index reaches the greed zone, it suggests a price correction.
On the other hand, when the metric moves into the fear zone, it indicates that the possibility of a price uptick is high. Therefore, the above index shows that BTC’s price might plummet more before it starts a bull rally.
Another key metric suggested a similar outcome. Notably, AMBCrypto’s look at Glassnode’s data pointed out that Bitcoin’s Network Value to Transactions (NVT) Ratio registered a sharp uptick.
For the uninitiated, a high NTC ratio generally hints that an asset is overvalued.
Source: Glassnode
Bitcoin investors should be cautious
A few more metrics also hinted at a possible price drop. AMBCrypto’s analysis of CryptoQuant’s data revealed that BTC’s Exchange Reserve was increasing at press time.
Its net deposit on exchanges was also high compared to the last seven-day average.
This meant that selling pressure on the coin was high at the time of writing. Additionally, BTC’s aSORP was in the red, meaning that more investors were selling at a profit, which is by and large a bearish signal as it indicates a market top.
Read Bitcoin’s [BTC] Price Prediction 2024-25
Things on the derivatives front also did not look very favorable for BTC. For example, its taker buy/sell ratio was red, suggesting that selling sentiment was dominant in the market.
As per Coinglass, BTC’s Futures Open Interest also remained somewhat flat at the time of the report, possibly indicating a slow-moving market.
Source: Coinglass
