Bitcoin Rebounds Above $44,000 After Dip Below $41,000
Bitcoin has made a recovery, with its price increasing by over 4% in the past 24 hours, reaching above $44,000. This comes after the digital asset experienced a drop below $41,000 earlier in the week, resulting in the liquidation of more than $500 million worth of leveraged positions across derivatives exchanges. These figures are based on data from Coinglass.
The uptick in Bitcoin’s price coincides with ongoing anticipation for a spot Bitcoin ETF and the release of minutes from the U.S. Federal Reserve. The minutes revealed that policymakers are considering multiple rate cuts in 2024.
According to The Block’s Price Page, Bitcoin is currently trading at around $44,025 as of 10:40 a.m. ET.
Bitcoin Price Correction Risks
However, a report by CryptoQuant suggests that short-term unrealized profits among Bitcoin holders are still at high levels, which historically precedes price corrections. The report also highlights that almost 88% of Bitcoin’s circulating supply is currently in profit, nearing a 12-month high.
CryptoQuant’s report further notes that sell volume is dominating in perpetual futures markets. The current taker buy/sell volume ratio has dropped below 1, indicating increased sell orders within the market.
In addition, an increase in BTC liquid supply on centralized cryptocurrency exchanges suggests growing sell pressure. This trend implies that more coins from exchange holdings may enter the market for sale.
Hot Take: Is Bitcoin Set for Further Volatility?
The recent rebound in Bitcoin’s price is a positive sign for investors. However, there are potential risks to be aware of. Short-term unrealized profits at elevated levels and an increase in sell pressure indicate the possibility of a price correction. It is important to monitor these factors closely to assess whether Bitcoin will experience further volatility in the near future.
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