CryptoQuant Shares Six Key Bitcoin Charts to Watch as Price Retraces to $67K

As Bitcoin faced a roadblock to the recent recovery, collapsing below $68K, CryptoQuant shares six important charts to watch over the coming week. 

With a surge from $62,800 to $69,000 last week, Bitcoin experienced an 11% increase. However, the price has since retraced to $67K, marking a slight 0.35% dip in the past 24 hours. 

According to a recent analysis by CryptoQuant, there are six important charts that investors should monitor as the market prepares for the future over the next few days.

Bitcoin Correction Drawdowns and Cumulative Returns

First, CryptoQuant confirmed that Bitcoin is currently only 6% below its all-time high (ATH) of $73,600, which it attained in March. 

The analytics resource shared the “Bitcoin Bull Market Correction Drawdowns” chart, which highlights the patterns observed during market cycles. The current 6% drawdown is a minor correction when compared to historical corrections seen in previous market cycles. 

This chart shows that Bitcoin’s recent price movements are typical of a bull market correction and resemble patterns seen in previous cycles. Such corrections are part of Bitcoin’s natural price discovery process, often followed by periods of renewed price growth. 

Another important chart to consider is the “Bitcoin Cumulative Return Index on a Halving Year,” which compares Bitcoin’s performance during previous halving cycles in 2012, 2016, and now 2024. 

Each of these cycles has shown strong action in Q4. This pattern suggests that Bitcoin’s current price movements may not be a coincidence, but a seasonal effect that could repeat again.

ETF Inflows 

One of the major drivers behind Bitcoin’s recent price surge has been the inflows from institutional investors, particularly those involved in Bitcoin Exchange Traded Funds (ETFs). 

The “BlackRock Balance and Balance Change” chart reveals that BlackRock alone purchased 15,950 BTC last week, representing an investment of $1.08 billion. Additionally, other major ETF providers, including Fidelity and Grayscale, have also seen substantial investments. 

Although Bitcoin remains the main focus, Ethereum has also seen important activity. The “ETH: Balance on Accumulation Addresses” chart shows that accumulation addresses now hold 19.2 million ETH, suggesting massive long-term interest in Ethereum. 

Moreover, last week’s ETF trading inflows for Ethereum amounted to $48 million. While Ethereum’s price has been under pressure recently, these accumulation trends could indicate that the market is gearing up for a rebound. 

Growing Bitcoin OI and Rising Retail Demand

However, one area of concern is the rising open interest in Bitcoin futures. The “Bitcoin: CME Futures Open Interest” chart shows that open interest on the Chicago Mercantile Exchange (CME) has reached an all-time high of $12 billion. 

Notably, high levels of open interest can sometimes indicate that a market correction may be on the horizon, especially if there is a large amount of leverage involved. 

Additionally, open interest on centralized exchanges (CEX) has also climbed to near-record levels at $21 billion. The Crypto Basic recently confirmed that the total open interest across all platforms spiked to a new peak of $40.5 billion yesterday.

Lastly, the “Retail Investor Demand Change” chart shows that retail investors are again entering the market. The 30-day moving average (30DMA) of retail demand has increased amid renewed interest from smaller investors. 

Typically, when retail participation grows alongside institutional inflows, it can lead to a surge in price. However, the influx of retail investors can also contribute to heightened market volatility.