Bitcoin (BTC) might be hovering above $90,000, yet the data suggests that its price is signaling a notable risk-off indicator. CryptoQuant’s multi-metric risk-off oscillator remains close to the “High-Risk” zone, a position that has historically foreshadowed corrections and reduced the chances of a lasting bullish momentum.
Key takeaways:
Bitcoin’s risk-off signal is situated near the “High-Risk” area, which previously indicated a downturn.
BTC’s Profit–Loss sentiment has reached a rare -3 level, suggesting a structural correction.
With a -32% drawdown, BTC finds itself between a correction and capitulation zone, potentially leading to a prolonged decline within the $90,000 to $80,000 range.
Bitcoin exhibits structural weakness near $90,000
CryptoQuant’s Risk-Off model utilizes six metrics — downside volatility, upside volatility, exchange inflows, funding rates, futures open interest, and market cap behavior — to deliver a data-driven overview of market fragility. With the oscillator near 60 in the High-Risk zone, the risk of correction remains high.
Bitcoin researcher Axel Adler Jr also observed that the profit/loss score has fallen to -3, indicating a significant concentration of unprofitable UTXOs. Historically, this level coincides with bearish phases and prolonged cooling periods. The ongoing -32% drawdown surpasses typical cycle pullbacks (-20%–25%) but remains above capitulation thresholds (-50% to -70%), positioning Bitcoin in a precarious “intermediate zone.”
Adler mentioned that unless macroeconomic conditions and on-chain profitability improve, the likelihood of further declines remains elevated, despite Bitcoin stabilizing around $90,000.
At this juncture, on-chain data from Glassnode provided a slight glimmer of hope. The analytics platform indicated that Bitcoin’s latest drawdown resulted in the largest surge in realized losses since the FTX collapse in 2022, predominantly driven by short-term holders (STHs).
Nonetheless, long-term holder (LTH) losses have remained relatively subdued, a trend that historically signals core holder resilience and has occasionally softened deeper capitulations in past cycles.
Related: Bitcoin price action, investor sentiment points to bullish December
Future of $100,000 Bitcoin hinges on momentum versus trend
A CryptoQuant analyst characterized Bitcoin’s progression towards $100,000 as a “psychological turning point.” A breakout could ignite fresh momentum, potentially aided by a Federal Reserve interest rate reduction on Wednesday; however, significant round numbers often trigger volatility and floundered attempts.
The growth rate difference (Market Cap vs. Realized Cap) remained at -0.00095, indicating that market capitalization is declining faster than realized capital. With BTC priced at $91,000, the analyst leans more towards recognizing structural vulnerabilities rather than trend augmentation.
Bitcoin futures trader Byzantine General also pointed out the unstable price action for BTC, stating,
“$BTC is struggling a bit here at this key resistance level. If it breaks through, it could fly over 100,000 very quickly, but if it actually rejects here, then we’re probably stuck in this 92,000-82,000 range for a while.”
Related: Bitcoin accumulation trends strengthen as realized losses near $5.8B
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
