Crypto Market Shakeout in Play — When Will the Bloodbath End?

With the larger crypto market down, multiple indicators signal towards a bearish shift. Bitcoin’s Coinbase Premium Index showed distinct trends that signaled potential for a market shakeout. Historically, when the index lingered in negative territory like recent decline to -0.58, indicated a higher selling pressure.

This phenomenon suggested that Bitcoin sold on Coinbase was trading at a discount relative to other exchanges. It is often a precursor to downward price movements.

Bitcoin price showed a pronounced correlation with fluctuations in the premium index. As the index dipped into the negatives, Bitcoin price and the crypto market cap retreated. This reinforced the premise of increased selling pressure.

Bitcoin price dipped below $95K as of press time. This coinciding with the index’s steepest declines, a clear marker of market trepidation.

The overlay of the 24 and 170 SMAs provided broader view of investor behavior over different timeframes, both converging into negative zones before partial recoveries.

These suggested that traders responded to immediate market conditions with a bearish outlook, potentially bracing for further declines.

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This pattern of negative premium alignment with price drops suggested that Bitcoin could continue to face short-term bearish pressures if the index remains negative.

Adjusted SOPR Shows Spikes in Profit-taking

Additionally, Bitcoin’s Adjusted SOPR (aSOPR) suggested significant profit-taking events as values spiked to levels above 3. This occurred simultaneously with the Bitcoin price declines.

As Bitcoin hovered above $100K in mid-December, the aSOPR once again rose sharply, suggesting another round of profit-taking that could potentially lead to further corrections.

This was followed by corrections, indicating sell-offs that pushed the price downwards to around $94K before a swift recovery.

The 7-day SMA of aSOPR also presented a trend where it exceeded the standard threshold, highlighting sustained selling pressure over the period.

This pattern aligned with a typical market shakeout, where quick gains are followed by rapid sell-offs as investors cash out, anticipating or reacting to market volatility.

This suggested that Bitcoin could be facing more fluctuations if the trend of high aSOPR continues, signaling ongoing sell-offs.

Binary CDD Spike Suggest Long-Term Holders Sell Pressure in the Crypto Market

The recent surge in Bitcoin’s Binary Coin Days Destroyed (CDD) also signaled potential selling pressure, particularly from long-term holders.

This metric reads a value of ‘1’ whenever Supply-Adjusted CDD surpasses its daily average which was yet to be hit but was close, suggesting significant movements of old coins.

The 30-day SMA of the Binary CDD showed pronounced spikes, indicating that long-term Bitcoin holders could be capitalizing on the current high price levels to realize profits.

Historically, such spikes in the Binary CDD often preceded market corrections, as they reflected a higher than usual activity by long-standing BTC holders, often leading to increased supply.

The clear displayed of these spikes aligned with Bitcoin’s price reaching a new all-time high of $108K.

Following this peak, there was notable volatility. Price adjustments reflected the market’s reaction to these large movements of aged coins.

This pattern suggested if the trend of high CDD continues, it could lead to further price corrections. As long-term holders may continue to sell into the strength, adding to the market’s instability.

This stressed the importance of monitoring veteran holder activities to predict significant price movements and potential market downturns following new highs.