Bitcoin (BTC) is currently trading just below $88,000, a significant drop from its all-time high of $109,000 earlier this year. Over the past month, the leading cryptocurrency has faced a steady decline, slipping nearly 15% and showing limited signs of a rebound.
While this bearish trend has many investors concerned, one CryptoQuant analyst, BilalHuseynov, recently shared his perspective on Bitcoin’s current state using the Retail Investor Demand (RID) indicator.
Bitcoin Retail Investor Demand at a Crossroads
BilalHuseynov’s analysis focused on Retail Investor Demand (RID). This metric, which gauges retail interest and activity in Bitcoin, can often provide insight into potential price movements.
According to the analyst, retail investor demand recently faced resistance near the neutral zone of around 0%. Back in mid-February, the RID indicator attempted to cross this threshold but fell short, resulting in Bitcoin’s decline to the current $88,000 level.
However, despite this setback, there are positive signs. The analyst noted that the RID is beginning to pick up again, a pattern reminiscent of June 2021 when Bitcoin saw a swift recovery after a similar dip.
However, for the metric to truly signal a positive turn, it would need to rise above the 0% neutral zone, indicating a potential shift in market sentiment. BilalHuseynov further elaborates on how the RID metric can guide long-term analysis. He identifies three key levels:
• Negative (-15%): A strong indicator to watch for buying opportunities.
• Neutral (0%): A sign that the market might be preparing for movements in either direction.
• Positive (15%): Suggests that Bitcoin’s price has entered a “premium area,” often seen during bull markets.
The analyst gave an example, highlighting that in October 2024, a surge above the 0% neutral zone coincided with Bitcoin reaching its all-time high.
Conversely, a dip back to 0% in late 2024 marked the onset of a bearish phase. Currently, the RID sits at a critical juncture, and a shift in retail demand could influence Bitcoin’s trajectory in the coming months.
Short-Term Indicators Point to Potential Rebound Opportunities
Meanwhile, other analysts are identifying short-term buying opportunities based on different metrics. Yonsei Dent, another CryptoQuant analyst, pointed to the Spent Output Profit Ratio (SOPR) for Bitcoin’s short-term holders (STH).
This metric, which measures whether short-term holders are selling at a profit or a loss, has recently dropped to levels that historically have indicated oversold conditions.
According to Dent, applying Bollinger Bands to the STH-SOPR helps pinpoint extreme deviations, and the current data shows a pattern similar to previous market bottoms.
Dent noted that each significant downside deviation in STH-SOPR has been followed by a short-term rebound ranging from +8% to as much as +42%, even during bear market conditions.
This historical context suggests that Bitcoin may be nearing a critical juncture. If the pattern holds, a short-term price recovery could be on the horizon, offering an opportunity for short-term traders.
Featured image created with DALL-E, Chart from TradingView
Samuel Edyme
Meet Samuel Edyme, Nickname – HIM-buktu. A web3 content writer, journalist, and aspiring trader, Edyme is as versatile as they come. With a knack for words and a nose for trends, he has penned pieces for numerous industry player, including AMBCrypto, Blockchain.News, and Blockchain Reporter, among others.
Edyme’s foray into the crypto universe is nothing short of cinematic. His journey began not with a triumphant investment, but with a scam. Yes, a Ponzi scheme that used crypto as payment roped him in. Rather than retreating, he emerged wiser and more determined, channeling his experience into over three years of insightful market analysis.
Before becoming the voice of reason in the crypto space, Edyme was the quintessential crypto degen. He aped into anything that promised a quick buck, anything ape-able, learning the ropes the hard way. These hands-on experience through major market events—like the Terra Luna crash, the wave of bankruptcies in crypto firms, the notorious FTX collapse, and even CZ’s arrest—has honed his keen sense of market dynamics.
When he isn’t crafting engaging crypto content, you’ll find Edyme backtesting charts, studying both forex and synthetic indices. His dedication to mastering the art of trading is as relentless as his pursuit of the next big story. Away from his screens, he can be found in the gym, airpods in, working out and listening to his favorite artist, NF. Or maybe he’s catching some Z’s or scrolling through Elon Musk’s very own X platform—(oops, another screen activity, my bad…)
Well, being an introvert, Edyme thrives in the digital realm, preferring online interaction over offline encounters—(don’t judge, that’s just how he is built). His determination is quite unwavering to be honest, and he embodies the philosophy of continuous improvement, or “kaizen,” striving to be 1% better every day. His mantras, “God knows best” and “Everything is still on track,” reflect his resilient outlook and how he lives his life.
In a nutshell, Samuel Edyme was born efficient, driven by ambition, and perhaps a touch fierce. He’s neither artistic nor unrealistic, and certainly not chauvinistic. Think of him as Bruce Willis in a train wreck—unflappable. Edyme is like trading in your car for a jet—bold. He’s the guy who’d ask his boss for a pay cut just to prove a point—(uhhh…). He is like watching your kid take his first steps. Imagine Bill Gates struggling with rent—okay, maybe that’s a stretch, but you get the idea, yeah. Unbelievable? Yes. Inconceivable? Perhaps.
Edyme sees himself as a fairly reasonable guy, albeit a bit stubborn. Normal to you is not to him. He is not the one to take the easy road, and why would he? That’s just not the way he roll. He has these favorite lyrics from NF’s “Clouds” that resonate deeply with him: “What you think’s probably unfeasible, I’ve done already a hundredfold.”
PS—Edyme is HIM. HIM-buktu. Him-mulation. Him-Kardashian. Himon and Pumba. He even had his DNA tested, and guess what? He’s 100% Him-alayan. Screw it, he ate the opp.
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