- On-chain analysts believe Bitcoin’s recent price decline has to do with overleveraged positions and low momentum.
- Bitcoin’s price dropped to US$67.8K after peaking at $68.5K, still higher than September’s low of $53K.
- Layer-1s? DeFi? Nope, seems like memecoins are the next to have a supercycle. At least that’s what one memecoin expert believes.
Is that it? That was Uptober for Bitcoin? Well, that’s what analysts think.
Bitcoin’s price has dropped to US$67.8K (AU$101K) after reaching a high of US$68.5K (AU$102.2). Well, I guess you could say that’s much better than September’s low of US$53K (AU$79K).
So, is that all for Bitcoin? Here’s what market observers are saying.
Overleveraged and Low Momentum
On-chain analyst XBTManager highlights that Bitcoin’s aggregated spot cumulative volume delta (CVD), which reflects retail buying pressure on exchanges, has decreased during this bullish phase.
Despite the recent price rally, retailers are not “supporting the rise”, he says, and instead have been selling at higher prices, weakening demand. He says demand must increase on crypto exchanges for the price to continue rising. Otherwise, BTC could drop to a support zone between US$63K and US$64K (AU$93.8K – AU$95.3K):
Bitcoin is at a resistance level and must now move into a decision phase. If the upward movement continues from here, there is a chance we might see a new all-time high.
XBTManager
As CNA reported, spot trading volumes across major centralised exchanges fell by 14.8% in Q3 2024, according to CoinGecko data.
Another factor contributing to this situation is the overleveraged state of the Bitcoin-USDT futures market. According to CryptoQuant CEO Ki Young Ju, the estimated futures leverage ratio across exchanges has reached an all-time high.
Overleveraged markets often precede volatility, as researcher Axel Adler Jr warns, stating that leverage volume exceeding 55% could trigger mass liquidations.
The Memecoin Supercycle
Memecoin analyst (a totally real profession) Murad Mahmudov’s theory of a memecoin supercycle has gained traction among traders.
Mahmudov actually did a 20-minute presentation explaining the theory, which suggests that meme-centric cryptocurrencies could experience an extended cycle of growth fueled by factors unique to the memecoin space.
Related: Miles Deutscher Reveals His Top Altcoin Pics for This Bull Run
Unlike traditional cryptocurrencies that rely on technical fundamentals, Mahmudov says, memecoins thrive on community sentiment, emotions, and the lure of quick wealth. The last point is what Mark Cuban calls “rug pulls in the works”.
The memecoin market capitalisation is up 3.7% from yesterday, currently at US$62B (AU$92.4B)
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