Author: Ryan Yoon, Analyst at Tiger Research
Translated by: Tim, PANews
Two weeks ago, I mentioned that Bitcoin may not break $100,000 yet. The price briefly touched $99,000 before falling back. Currently, Bitcoin is still consolidating around $90,000.
At this time, most people will be curious: 'Is it time to buy the dip?'
Yes, it's possible to buy in batches. But you must set strict stop-losses.
Bitcoin enters consolidation: key choices are approaching.
Prices are holding above $87,900, which is the average cost for active buyers.
The active realized price represents the breakeven line for the entire market. After the market crash in 2022, it took a year and a half to regain this level. With prices bottoming out and rising, the market can finally breathe a sigh of relief.
Please pay close attention to this point and use it as your baseline.
At the same time, observe the relationship between the cost line of short-term holders and the active realized price line. If the short-term line crosses below the active line, the risk will increase rapidly. Currently, this adverse crossover has not occurred.
2. On-chain signals are weak, but potential returns are rich.
Although on-chain key indicators show a downward trend, profit opportunities remain high because we are at the bottom of the value area.
MVRV Z-Score is currently at 1.17. It has moved out of the cheap price range but has not yet significantly risen. The growth rate is slowing here due to the intertwining forces of buyers and sellers. The current trend is weak and directionless.
aSOPR (Adjusted Spent Output Profit Ratio) is flat at 1.0. Sellers are trading at cost price, even choosing to sell at a thin profit.
NUPL is at 0.36, just entering the balance range. Short-term holders' NUPL is -0.155, and new buyers are in a loss position. Once the price reaches the cost line, they will sell. This confirms that market sentiment is weak.
Overall, holders often sell when they have a slight profit. But please note: when MVRV (Market Value to Realized Value Ratio) approaches 1.10, it is an excellent buying opportunity for long-term investments. The risk is lower at this point, and historical data shows that an average return of 40% can be obtained in the following year from this point.
3. Bitcoin 'death line': $84,000
Falling below $84,000 poses great risks and may trigger long-term sell-offs.
The cost distribution chart shows a dense buy wall around $84,000 (in the range of $83,000-$85,000), which is the cost range of a large buying group recently. If the price loses this level, short-term holders will face deep losses, possibly triggering panic selling.
If Bitcoin's price significantly falls below $84,000, it will disrupt the existing market structure. On December 1, when the price reaches $83,000,
Market panic is rising sharply. $84,000 is not only a technical threshold on the chart but also the last line of defense for maintaining the breakeven point for holders.
4. Open interest: fell back to the low point
The open interest in the futures market has fallen back to April lows, indicating that the crazy leveraged positions have been cleared.
This significant drop is good news; low leverage reduces the risk of market crashes or consecutive plunges. The market has already squeezed out the bubble, and now conditions are in place for an upward movement on this solid foundation. We can expect a new trend to emerge from this price range.
5. It is now possible to buy the dip, but strict stop-loss settings are required.
On-chain tools indicate that now is the best time to buy the dip. The market bubble has dissipated, and expected returns will exceed risks. Building a position now is a wise choice.
But if you care about risks, don’t just buy indiscriminately. Set clear stop-loss lines, as the market trend remains unclear at the moment.
When the price falls below the active realized price, most active traders will face losses. This will trigger panic in the market, which may lead to a market crash.
Set your stop-loss at $87,900. This allows you to buy when prices drop and control risk when the critical support level is breached. If the support level fails, be sure to keep cash.
(The above content is excerpted and reprinted with the authorization of partner PANews, original link)
"Is it time to buy the dip? Bitcoin enters a key consolidation zone, closely watching the $84,000 'death line'" This article was first published in (Blockcast).
