Bitcoin has rebounded more than 9 percent over the past week, trading at slightly more than $63,900 as of Tuesday. However, BTC’s on-chain setup is neutral to slightly bearish in the short-term.
Bitcoin leverages slides down but risks remain
According to exchange data received on Tuesday, BTC’s leverage has cooled down over the past few days. However, the cryptocurrency’s exchange inflows and funding rates remain elevated, causing concerns for the bulls.
On Tuesday, BTC exchange inflows turned slightly positive at roughly 556 BTC, following Monday’s 4,461 BTC outflow. That said, the seven-day cumulative inflow of about 282 BTC. As a result, the current inflow can’t really be dubbed a strong evidence of selling pressure.
At the same time, BTC funding rate fell from 0.00809 to 0.00719, although it remains above the 30-day average of 0.00457. Essentially, Bitcoin’s long positioning is still crowded enough to create downside risk if price shows any weakness.
In the same vein, Bitcoin’s open interest fell 1.3 percent to almost $21.02 billion. It is down 4.3 percent from its Friday level. This suggests some leverage has been cleared, although funding remains too elevated to call the derivatives market fully healthy.
Is BTC nearing a bottom?
Bitcoin’s realized price has stayed flat around the $53,102 mark, showing little change in the market’s broader cost basis. However, without spot price data, the current valuation gap cannot be assessed.
For the uninitiated, Bitcoin realized price is the average price at which all circulating BTC last moved on-chain, making it a widely used estimate of the market’s aggregate cost basis.
When Bitcoin trades above the realized price, most holders are in profit. On the contrary, when it trades below it, a large portion of the market is holding unrealized losses.
Meanwhile, there’s been a brewing conversation in the market about Bitcoin potentially hitting its market bottom for the current cycle. On Tuesday, research firm K33 forecasted that BTC bottom is likely a few weeks away.
In contrast, banking giant Standard Chartered called the Bitcoin bottom on June 13 when the digital asset hit its yearly-low of around $59,000.
