Main Highlights:
Bitcoin maintained trading within a range above $120,000 following an 8% leverage adjustment in futures.
Increased spot demand and falling open interest indicate a revival of buyer confidence.
The MVRV ratio suggests a possible rise of 15% to 25%, aiming for $140,000 to $150,000 by Q4’s conclusion.
Bitcoin (BTC) has continued to trade between $120,000 and $125,000 after a sharp yet orderly deleveraging across futures markets, hinting that $120,000 may serve as a crucial demand zone for traders in the near term.
Market analyst Skew noted that Bitcoin’s recent bounce from the $120,000 level highlighted buyer interest at that level. Data from Binance’s spot market indicated a rise in cumulative volume delta (CVD) around the $120,000 threshold, showing renewed interest in spot buying.
Meanwhile, perpetual futures markets showed bids clustering at the same level, with decreasing open interest indicating that short positions were being closed as prices rose.
These dynamics suggest the possibility of establishing a new short-term “value area” around $123,000 over the ensuing days, with increased supply above this level.
Onchain metrics align with this consolidation narrative. Analyst Maartunn noted that short-term holders are nearly evenly divided between realizing gains and losses, with 24,100 BTC sent to exchanges at a profit versus 19,700 BTC at a loss, creating a “near 50/50 split, but biased toward profits.”
Additionally, Binance data highlighted the leverage reset during the recent downturn. Open interest for Bitcoin on the exchange dipped to $13.88 billion from a peak of $15.07 billion on Oct. 6, marking a 7.9% decline over three days.
This decrease in leverage generally suggests cautious repositioning rather than a mass exit, potentially setting the stage for a more stable rally once new capital flows back into the market.
Related: Bitcoiners are in profit, but beware of short-term fragility: Glassnode
MVRV Analysis Forecasts Positive Q4 Outlook
Even as the short-term trend indicates consolidation, analysts are generally optimistic regarding Bitcoin’s direction toward year-end. Market strategist Timo Oinonen highlighted the MVRV (Market Value to Realized Value) ratio as a crucial metric for potential upside. The MVRV ratio contrasts Bitcoin’s current market cap with its realized value, gauging whether the asset is over or undervalued concerning its holders’ cost basis.
According to Oinonen, Bitcoin’s MVRV currently implies a base scenario where prices could increase by 15% to 25% towards $140,000–$150,000 by Q4’s end, bolstered by long-term holder accumulation and resilient short-term cost foundations.
A more optimistic scenario, where the MVRV exceeds 4.0, similar to the 2021 cycle, could propel BTC toward $170,000 to $200,000 amidst renewed market enthusiasm and a potential post-halving supply crunch.
Related: Bitcoin has 100 days to go ‘parabolic’ or end its bull market: Analysis
This article does not provide investment advice or recommendations. All investment and trading activities involve risks, and readers should conduct their own research before making any decisions.
