TL;DR
- Bitcoin has regained its short-term cost basis ($61.9k) and is approaching the 200-day moving average ($63.9k) following the 0.50% rate cut by the Federal Reserve.
- Despite a period of capital outflows, new investors are showing confidence, with relatively low realized losses.
- The perpetual futures market is showing a slight recovery in demand for long positions, although it remains below the levels of strong bull markets.
In the current context of the cryptocurrency market, Bitcoin has managed to regain its cost basis for short-term holders, set at approximately $61.9k, and is approaching the 200-day moving average, which stands at $63.9k.
This move has coincided with a 0.50% reduction in interest rates by the Federal Reserve, which has influenced risk perception and generated slight optimism among investors, according to the latest report from GlassNode.
However, recent market history has been marked by a period of net capital outflows, indicating that pressure on short-term holders is easing as prices outstrip their acquisition costs.
Although many of these new investors are facing unrealized losses, the magnitude of these losses is significantly smaller compared to the market declines seen in 2021 and during the COVID-19 crash in 2020.
This context suggests that while there is a cautious sentiment, there is underlying confidence in Bitcoin’s (BTC) recovery potential.
Indeed, capital flow indicators have shown that, in times of market correction, short-term holders tend to liquidate their positions, leading to a revaluation of the young supply in relation to the spot price.
Confidence of New Bitcoin Investors
The behavior of short-term holders is crucial to identifying market turning points.
Pressure on this group has increased as unrealized losses mount, which may lead to a greater propensity to sell at a loss.
However, the recent trend shows that new investors are maintaining remarkable confidence, despite market conditions.
This is reflected in the profitability ratios of their investments, which, although negative, have shown a lesser severity in their falls compared to previous episodes.
In addition, the perpetual futures market offers another layer of analysis regarding the confidence of new capital.
With the funding ratio rising to 0.05%, a renewed interest by speculators in long positions is suggested.
However, this figure remains moderate and does not reflect the strong overall demand seen in previous years.
The Bitcoin market is in a prolonged consolidation phase reminiscent of the periods of 2019 and 2020.
Although capital flows have decreased since the March ATH, the resilience of new investors is a positive aspect amid a challenging environment.
With a slight recovery in futures markets and cautious position management, confidence could be the key factor that propels Bitcoin into a new growth cycle, leaving behind the pressure it has faced recently.
