A recent study has revealed a precarious situation for Bitcoin within the cryptocurrency landscape. An analyst from CryptoQuant has warned that if the leading cryptocurrency dips below the $85,000 mark, it could trigger a surge in selling pressure, potentially exacerbating its decline.
Axel Adler, a CryptoQuant analyst, highlighted that the Net Pressure Tilt indicator—which gauges buying and selling dynamics among short-term investors—has plummeted to its lowest point in three years, now sitting at around 5%. Adler interprets this figure as signifying a temporary balance between market buyers and sellers. However, historical trends suggest that such balances are typically fleeting and can quickly reverse direction.
The Net Pressure Tilt is derived from calculating the weighted difference between buying and selling pressures of short-term investors. A positive reading implies that selling pressure surpasses buying pressure; conversely, negative readings indicate stronger buying activity. Presently, data shows that the 24-hour moving average for Net Pressure stands at 4.79 while Bitcoin’s price hovers near $87,324. In comparison to this current state, the three-year median for this indicator is significantly higher at 73.17—indicating that periods of market growth generally experience greater selling dominance.
Experts observe that there exists an equilibrium between buyers and sellers among short-term traders currently; however, they caution that similar situations in previous cycles often transitioned back to increased selling pressure following brief upward movements during bullish phases. The present circumstances appear more intricate: Bitcoin’s trading price has lingered approximately 13.9% beneath what short-term investors initially paid over roughly two months—a clear indication of substantial losses for these traders as well as an entry into bear market territory.
The analyst warns about a critical scenario where Bitcoin drops below $85,000; such an event would likely push Net Pressure down past -15—signaling potential acceleration in sell-offs and possibly leading to sharper declines ahead.
*This information should not be construed as investment advice.