Bitcoin has recently experienced a significant surge in value, surpassing the $64,000 mark. This increase, amounting to a 2.8% rise within 24 hours, followed the U.S. Federal Reserve’s decision to cut rates. This decision has sparked positive sentiment across various risk assets.
Bitcoin Price Increase
Bitcoin’s price reached over $64,000, representing a 2.8% increase within 24 hours. This occurred following the U.S. Fed’s decision to cut rates, sparking positive sentiment among numerous risk assets, including Bitcoin.
Possible Reversal Ahead?
Despite the recent price increase, some analysts are cautiously analyzing Bitcoin’s fundamentals to determine the sustainability of this rally. A CryptoQuant analyst, known as ‘Darkfost,’ pointed out a potential red flag using the Stock-to-Flow (S2F) reversion chart, often used to predict Bitcoin’s price movements. According to Darkfost, the S2F ratio is currently in a green zone, suggesting a buying opportunity. However, the last two times this occurred, a significant pullback followed. This raises questions about whether the current rally will continue or if another retracement is imminent.
Bitcoin's Fundamentals
Despite potential reversal concerns, Bitcoin’s fundamentals exhibit signs of strength that could support further upward movement. One key metric is the recovery of Bitcoin’s active addresses, an indicator of retail interest. Recently, this figure has risen to over 700,000, suggesting increased user engagement. Another important metric is Bitcoin’s Spent Output Profit Ratio (SOPR), which measures whether investors are selling their Bitcoin at a profit or a loss. Currently, Bitcoin’s SOPR is at 1.01, up from 0.994 in late August, indicating that more investors are realizing profits on their Bitcoin holdings, signaling a healthier market sentiment.
Overall, despite Bitcoin’s recent price surge and positive fundamental indicators, some analysts warn of a potential correction. Continuous analysis of data and market factors will be crucial in understanding the future direction of Bitcoin’s price.
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