Bitcoin Insights Highlight Buying Potential as Price Levels Close in on $95K

Bitcoin Approaches $95K Mark as On-Chain Metrics Suggest Potential Rebound After Recent Dip

Bitcoin (BTC) hovered just under $95,000 on Friday morning, recovering slightly from a steep decline that took it near $90,000 on Thursday. This marks a 10% drop from its peak above $120,000 earlier this week, a reminder of the market’s volatility.

Despite the recent slump, on-chain data and investor sentiment indicate that the current price levels could present a prime buying opportunity for those looking to enter the market.

On-Chain Data Highlights Market Opportunity

One key indicator being closely watched by investors is Bitcoin’s Spent Output Profit Ratio (SOPR), which tracks the profit or loss of Bitcoin transactions. As of Friday, SOPR registered 0.987, signaling that short-term holders are selling at a loss. Historically, such behavior has often been followed by price recoveries, suggesting a potential bottoming phase for Bitcoin.

Other key metrics, including the Market Value to Realized Value (MVRV) ratio and Puell Multiple, support the view that Bitcoin may still be in a strong bullish trend. CryptoQuant analyst Mac_D explained that short-term losses often pave the way for long-term accumulation opportunities.

“As short-term traders sell at a loss, they are inadvertently providing an opportunity for long-term investors to accumulate BTC at more favorable prices,” Mac_D said. “We’re likely in the middle of a temporary pullback, not the start of a bear market.”

The Role of SOPR and MVRV in Identifying Market Bottoms

SOPR measures the profitability of Bitcoin transactions by comparing the value of coins when last moved to their value when spent again. A SOPR value below 1 suggests market capitulation, often indicating that a local bottom has been reached.

Similarly, MVRV compares Bitcoin’s market cap to its realized cap, which is calculated based on the price at which each coin last moved. A lower MVRV ratio signals undervaluation, which often precedes a price rebound.

Macro Data Contributes to Short-Term Volatility

The latest sell-off was triggered by fresh economic data, including a strong Institute for Supply Management (ISM) report on the U.S. services sector. The report revealed a sharp increase in prices paid, sparking fears of more aggressive Federal Reserve rate hikes.

Now, traders are waiting for Friday’s U.S. non-farm payrolls (NFP) report for more guidance on the U.S. economy. A strong NFP report could reinforce the expectation of tighter monetary policy, which tends to weigh on risk assets like Bitcoin.

Is Bitcoin Heading for a Rebound?

Despite the short-term volatility, many analysts believe Bitcoin is poised for a recovery, especially if it continues to hold near the $95,000 mark. Historically, price corrections such as the one seen this week have often provided buying opportunities before the market resumes its upward trajectory.

As the market digests the latest economic data and positions itself for the next phase, Bitcoin’s potential for further growth remains strong. Investors looking to accumulate may find that the current price range represents a favorable entry point for the next leg of Bitcoin’s bull market.