New York, NY – An analysis of the exchange flow metric suggests a possible local bottom for Bitcoin (BTC) and Ethereum (ETH) in the market. Despite struggles by bulls to shift the market dynamic in their favor, recent losses have led both cryptocurrencies back to a crucial support zone where buyer behavior will determine the next price move.
Following a drop in price, Ethereum’s MVRV and NVT ratios indicate that the asset may be undervalued. While there is a possibility of a short squeeze at the $3500 liquidity pocket, overall momentum remains bearish. On the other hand, a BTC mining activity investigation reveals a decrease in mining activity and a trend of miners selling Bitcoin, though the intensity of selling pressure has lessened in recent days.
An examination of the exchange netflow metric sheds light on market sentiment, suggesting that bulls may not have much to celebrate at present. When analyzing the net flow trends using 30-day simple moving averages, it is evident that Ethereum saw significant inflows in mid-March and late May, marking a local top for the price in both instances.
Bitcoin, on the other hand, experienced consistent accumulation in February and March, with outflows dominating the exchange flow according to the 30DMA. Though there were occasional spikes in BTC inflow in late April and May 21st, they were exceptions to the overall trend of outflows.
In light of this data, it is speculated that Bitcoin and Ethereum could be headed towards a period of consolidation. An examination of the in/out of the money data for both cryptocurrencies reveals key support and resistance levels, suggesting that price movements may become confined within these ranges, leading to a consolidation phase in the market. This insight provides valuable information for traders and investors looking to navigate the current market conditions.