- After the recent drop to $56.8k, Bitcoin seemed to have a short-term bearish bias.
- Signs of accumulation and demand were present, but the consolidation period might not end soon.
Bitcoin [BTC] was up 4.6% in the past week. The Bitcoin ETF inflows chart also suggested that the bulls were gaining strength.
The Grayscale Bitcoin ETF GBTC, which was notorious for consistent outflows, saw a change earlier in May.
This does not mean that its short-term bias has shifted bullishly. The technical structure remained bearish. It is worth examining the on-chain metrics to understand where prices could be headed next.
Resolving the long and short-term outlook
In a post on CryptoQuant Insights, analyst Kripto Mevsimi pointed out that the recent correction saw the Bitcoin supply in profit decline.
A set of bands was used to highlight where the overheated zone, the bottom discovery, and the threshold for optimism and pessimism were.
At press time, the metric was headed toward this threshold. If it falls below it, we could witness a deeper correction as BTC falls toward bottom discovery.
So long as the metric stays above this line, market sentiment would likely be positive overall, and bulls could hope for a recovery.
In the 2016 cycle, the supply in profit metric was continuously in the overheated zone for months without a major correction.
The 2020 July-2021 January run also saw the overheated zone visited frequently. We are not yet in that part of the cycle.
Ideally, BTC bulls want to see the gray line defended and prices recover and push higher and rally in the coming months to resemble the previous cycle bull runs.
Is it a good time to buy Bitcoin, or should you wait?
The long-term bias of Bitcoin was bullish, the short-term was bearish. The possibility of a deeper correction is present.
AMBCrypto investigated some metrics from Santiment to understand if a buying opportunity is present.
The 30-day MVRV has been negative for a large part of the past month. This showed that the asset was undervalued. However, the 3-day weighted sentiment remained negative in the past two weeks.
Read Bitcoin’s [BTC] Price Prediction 2024-25
The mean coin age metric looked to have halted its previous downtrend over the past month. It has inched its way higher over the past month. Combined with the MVRV, this was a signal to buy Bitcoin.
However, the price action suggested that the bears currently have the upper hand, and $55k could be visited this summer.