Profit from Bitcoin supplies has dropped to a 41-day low of 91.71%, indicating a decline in investor confidence.
The long-to-short ratio is shifting towards a bearish trend, indicating a decline in optimistic sentiment among leveraged traders.
Bitcoin is facing a potential price correction, with key support around $110,000 and resistance around $120,000.
Bitcoin is struggling to maintain its upward trend since reaching a new all-time high of $122,054 on July 14. At the time of this article's publication, the leading cryptocurrency is trading around $113,000, which indicates a decline of nearly 7.4% over the past 19 days.
Bitcoin's yield has fallen to a 41-day low.
According to Glassnode, the percentage of profit for BTC fell to a 41-day low of 91.71% on August 1. This metric measures the share of circulating BTC supply that is currently profitable. It reflects market sentiment, which often peaks during euphoric rallies and declines as investor confidence wanes.
As this metric declines, an increasing number of shareholders are either breaking even or incurring losses. Historically, such market conditions coincide with periods of market consolidation or potential price corrections.
The recent drop to 91.71% indicates market cooling after several weeks of price increases. It reflects a shift in sentiment as fewer shareholders remain comfortably in profit.
This may weaken short-term buying pressure and expose BTC to the risk of further declines over the next few trading sessions.
Bitcoin is undergoing serious testing amid bearish sentiment from futures traders.
The long-to-short ratio for BTC has tilted towards a bearish trend, confirming that bullish sentiment among leveraged traders may also be weakening. At the time of publication, it stood at 0.96 and was below one.
The long/short metric measures the ratio of long to short positions in the asset's futures market. A ratio above one signals a predominance of long positions over short ones. This indicates a bullish sentiment, as most traders expect the asset's value to increase.
On the other hand, a long-to-short ratio below 1 means that more traders are betting on a decline in the asset's price than those expecting an increase.
The next step for Bitcoin: a breakout above $111,855 or a rise above $120,000?
The daily trading volume of Bitcoin has decreased compared to July peaks, indicating reduced market activity. If profit-taking intensifies, the price of the 'king coin' may fall to $111,855.
However, if new demand emerges in the market, the coin's price could recover and reach $116,952. Breaking this resistance is crucial for the coin to rise above $120,000 again.