Autor Cointelegraph By William Suberg

Bitcoin (BTC) could still crash to $29,000 and lower, but price action is “healthier” than a week ago, the latest research concludes.In a fresh market update on Friday, analysts at trading suite Decentrader said that BTC price action is finally showing “green shoots of optimism.”Eyes on “near-term relief bounce” for BTCAfter a difficult week in which BTC/USD dipped to just under $33,000, market analysis is now focusing on the likely outcomes of the rangebound behavior seen over the past few days.For Decentrader, there is reason to be cautiously optimistic now where there was none a week ago.“We believe that the current derivatives landscape shift and this extremely negative sentiment backdrop does increase the potential for at least a near-term relief bounce,” analysts summarized.The reason lies in factors that had previously not fully “reset” as price action declined, notably the structure of derivatives markets. These include open interest declining toward less speculative levels, along with deepending negative funding rates.As Cointelegraph explained, negative rates correspond to overall market sentiment calling for fresh losses — often perfect conditions for an upward price shift.“We are now also beginning to see meaningful buyers step in, which is driving a potential change in the higher time frame trend from bearish to bullish,” the market update added about the additional positive pressure on the available BTC supply.Selling overall, while uncharacteristic of bull markets, hints that those behind it are taking losses.Bitcoin futures open interest chart. Source: Coinglass$29,000 and under seen as less likelyGoing forward, the outlook for support is a bounce zone at $29,650, something tha would itself only come into play should several other areas above $30,000 fail to hold.Related: Bitcoin ‘enters value zone’ as BTC price floor metric goes green againTo the upside, meanwhile, resistance lies between $38,850 and $39,700, Decentrader said, followed by a significant “empty” patch to $47,900 and then $53,400.“Support remains for now at $32,700 though there is some argument to suggest that price reached that level with Monday’s wick falling just $300 short of it,” the update reads.“Beyond that level, the next support is just shy of $30k, at $29,650 leaving the door open for a potential sub-$30K liquidity grab.”Sentiment, in line with funding, continues to stay in “extreme fear,” as per the Crypto Fear & Greed Index, this now rivaling the 2018 bear market trough and the March 2020 coronavirus crash in terms of record-breaking length.Crypto Fear & Greed Index. Source: Alternative.me

Bitcoin (BTC) sellers’ losses are mounting as the BTC price downturn shows that some investors are panicking at current prices.Data from on-chain analytics firm Glassnode and trading suite Decentrader shows that in January, more and more BTC entities have been selling coins for less than they purchased them.On-chain loss selling now “consistent”While no one wants to sell an asset without profit, Bitcoin downtrends tend to see a certain cohort of market participants do so anyway — for fear of greater losses if they stay put.This panic selling is often derided by long-term investors, who argue that stronger, more liquid players will scoop up the supply to the detriment of those who sold.Analyzing the spent profit output ratio (SOPR) metric, Decentrader analyst Philip Swift revealed that while selling overall remains relatively low, panic has set in this year.“SOPR (Spent Output Profit Ratio) has had a consistent patch of on-chain loss selling recently, he summarized to Twitter followers this week.SOPR takes the aggregate “price bought versus price sold” data for BTC in a given period to produce an overall impression of whether sellers are in profit or at a loss.As noted by its creator, Renato Shirakashi, the psychology of selling at a loss means that only those in panic mode are likely to do so, and by extension, the shallower selling this month could be cause for relief.“It’s interesting to note that the selling at a loss the past few months has been much more shallow vs. 2018/19 bear market, but much deeper than we saw in either bull run period,” Swift nonetheless added. “Is this a bull or bear market rn?”Bitcoin spent profit output ratio (SOPR) chart (screenshot). Source: DecentraderAs Cointelegraph reported, Bitcoin’s price activity has surprised with its 50% retracement since November, this being somewhat uncharacteristic of what should be the most bullish part of its halving cycle.Zooming out, the whole of 2021 arguably looks like a consolidation zone after rapid gains a year ago.Big players dominate the transactionsMeanwhile, should selling be from low-volume retail investors, this would chime with other data covering on-chain transactions.Related: Derivatives data suggests that Bitcoin’s $39K bounce was a mere blipAs Glassnode confirmed this week, the majority of transactions now involve significant sums of $1 million or more. This, the firm concluded, points to institutions, not retail, as the driving on-chain force.“Bitcoin transfer volumes continue to be dominated by institutional size flows, with more than 65% of all transactions being larger than $1M in value,” a tweet read. “The uptrend in institutional dominance in onchain volumes started around Oct 2020 when prices were around $10k to $11k.”Bitcoin transfer breakdown annotated chart. Source: Glassnode/Twitter2022 has been announced as the year in which institutions indeed return to the Bitcoin space.