Bitcoin (BTC) seems to be losing its recent gains. The lack of interest in the spot markets could lead to a deeper correction, according to analysts.
The leading cryptocurrency dropped below the psychological $40,000 support level and was trading at $38,250 at the time of writing. The downtrend appears to be driven by leveraged traders in the futures markets, according to Crypto Briefing’s analysis. Meanwhile, whales in the spot markets seem to be waiting for the asset to drop further before accumulating more tokens.
Approximately 67.6% of all accounts on Binance Futures are long on Bitcoin at the time of writing. The data shows that investors are overly optimistic about the future price action as the BTC/USDT Long/Short Ratio has risen to a monthly high of 2.08. Optimism among traders can often create conditions for a long squeeze occurring right now. The fact that whales are not re-entering the market makes it more likely to get stuck.
Source: Binance On-chain data shows that the number of addresses on the network holding between 100 and 100,000 Bitcoins has remained stable over the past month. These wealthy market participants are not interested in buying Bitcoin at current price levels, probably because they expect lower dips.
Source: Santiment The lack of interest in spot markets can also be seen in the number of new daily addresses joining the network. Despite the 40% price increase that Bitcoin has experienced in the last three weeks, the network is not experiencing any significant growth. Glassnode data shows that the number of new daily addresses remains stable at an average of 400,000 per week. Given the high correlation between network growth and Bitcoin price, it is reasonable to expect an increase in this on-chain metric that supports the continuation of the uptrend.
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