- Bitcoin has fallen by more than 2.5% in the past seven days.
- Statistics suggested that selling pressure on BTC was high.
Bitcoin [BTC] failed to post profits in recent weeks as its value continued to fall. The price of the king coin, after reaching $48,000 on January 11, fell below the $42,000 mark at the time of writing.
This price drop caused a major change in one of BTC’s most important metrics.
Further price drop on the way?
Last week wasn’t the best for Bitcoin, as its value plummeted by more than 2.5% in seven days. According to CoinMarketCapAt the time of writing, BTC was trading at $41,595.04 with a market cap of over $815 billion.
BTC trading volume also declined, due to less investor interest in trading the coin. Meanwhile, Bitcoin’s Fear and Greed Index became 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 to measure the general mood of the cryptocurrency market, using social signals and market patterns. When the index reaches the greed zone, it indicates a price correction.
On the other hand, when the measure moves into the fear zone, it indicates that the possibility of a price increase is high. The index above shows that BTC‘s price could fall further before a bull rally begins.
Another key metric suggested a similar result. Notably, AMBCrypto’s look at Glassnode’s data indicated that Bitcoin’s Network Value to Transactions (NVT) Ratio registered a sharp increase.
For the uninitiated, a high NTC ratio generally indicates that an asset is overvalued.
Source: Glassnode
Bitcoin investors should be careful
Some more statistics also pointed to a possible price drop. AMBCrypto’s analysis of CryptoQuant’s data revealed that BTC’s exchange reserve was increasing at the time of writing.
Net deposits on the exchanges were also high compared to the average over the past seven days.
This meant that selling pressure on the coin was high at the time of writing. Additionally, BTC‘s aSORP was in the red, meaning more investors were selling at a profit, which is generally a bearish signal as it indicates a market top.
Read Bitcoins [BTC] Price prediction 2024-25
Things also did not look very favorable for BTC in the field of derivatives. For example, the buyers’ buy/sell ratio was red, indicating that sales sentiment was dominant in the market.
According to Coinglass, BTC Futures Open Interest was also somewhat flat at the time of the report, possibly indicating a slow-moving market.
Source: Coinglass