Bitcoin fell 11% between Jan. 7 and Jan. 9, breaking below the $92,000 level for the first time in nine days, leading to the liquidation of over $257.5 million in leveraged long positions. Despite this short-term bearish momentum, indicators suggest that this drop may mark a local bottom for BTC, offering a potential buying opportunity. The Spent Output Profit Ratio (SOPR) dropped to 0.98, indicating short-term holders are selling at a loss, which has historically suggested price recoveries. Similarly, the Entity-adjusted Dormancy Flow indicator fell to 210,000, signaling a potential bottom. Additionally, the distribution of Bitcoin supply by long-term holders has peaked, suggesting a shift from distribution to accumulation, which often occurs at market bottoms. Overall, the metrics indicate that investors might see the price action at $92,000 as a shakeout rather than the start of a new bear cycle.

Source 🔗