The Bitcoin Cycle Extreme Value Index has dropped to 15.8%, indicating weakened market activity.
Data from CryptoQuant indicates that Bitcoin may experience another decline before a strong rebound.
The open interest of Bitcoin contracts still amounts to $53.19 billion, indicating that trader activity remains active.
Bitcoin is moving upwards towards the $81,000 range, bringing traders hope that the market may be on the mend. However, Bitcoin cycle indicators CryptoQuant indicate that BTC has not yet reached the conditions that were present near significant market bottoms. Meanwhile, derivatives data point to ongoing leveraged trading.
Could this rebound just be a trap before the next round of decline?
CryptoQuant signals: Bitcoin is still in a correction phase
According to the data from CryptoQuant, the Bitcoin Cycle Extreme Value Index has dropped to 15.8% on the 30-day moving average, placing the market in a "observation/low pressure" zone. BTC is also currently about 46% lower than its previous historical high, indicating that a broader range of corrections is still evident.
The periodic extreme oscillator also shows a similar pattern. Its 30-day moving average is still close to the lower end of historical ranges and below the level of 1.0; in the past, this level has usually been associated with stronger periodic extremes.
This means that the current market is cooling down, rather than experiencing the extreme conditions that are commonly seen near major turning points in history.
The Bitcoin derivatives market still exhibits high leverage.
The derivatives market also indicates that traders remain cautious. CoinGlass data shows that there are approximately $53.19 billion in open Bitcoin contracts, indicating that there are still a large number of leveraged positions in the market.
However, with a positive funding rate of 0.011%, it means that long traders are paying funding fees to short traders. This indicates that even though Bitcoin is having difficulty maintaining its rebound, long positions remain active.
The long-short ratio is approximately 0.97, slightly below 1, indicating that there are slightly more short positions than long positions, suggesting that traders still have doubts about whether prices can continue to rise.
Liquidation data also shows that volatility continues. In the past four hours, Bitcoin recorded approximately $5.93 million in short liquidations and $3.65 million in long liquidations.
$81,000 may become the next test for Bitcoin
As of now, Bitcoin is trading at around $80,107, and at one point during the session it reached $81,235. It encountered resistance near this level, making $81,000 an important short-term resistance zone.
If it can continuously break through $82,700, it may weaken the bearish outlook and create room for a rise towards $90,000.
However, if Bitcoin fails to break through $81,000, it may continue to fall further, with prices possibly dropping to the range of $76,000 to $77,000.
