Despite a recent price recovery pushing Bitcoin towards $106,000, underlying market indicators point to weakening sentiment and potential price pressure ahead. The Advanced Sentiment Index, a key gauge of market mood, has fallen to 46.1%, dipping below the neutral 50% threshold. This decline suggests a lack of conviction behind the price rebound.
Adding to the cautionary signals, Bitcoin’s Open Interest (OI) witnessed a significant drop of $4.1 billion, falling from $37.8 billion to $33.7 billion. This substantial reduction indicates diminished trader confidence and thinner market liquidity, often preceding increased volatility.
Further technical analysis reveals persistent negative momentum. Both Net Buy Volume and the On-Balance Volume (OBV) indicator remain in negative territory, reflecting reduced bullish conviction and active selling pressure, particularly from Long-Term Holders (LTHs). This profit-taking behavior is corroborated by a notable surge in the Spent Output Profit Ratio (SOPR).
Analysts suggest that for Bitcoin to sustain gains above the $107,000 level, a significant shift is required: the OBV must climb above -80K and market sentiment needs to exceed 65%. Without these improvements, the path of least resistance appears downward, with a potential decline towards the $101,500 support level becoming more likely.
Overall, the market exhibits cautious behavior characterized by low trading volumes and a clear trend of profit realization by long-term investors, tempering optimism from the recent price bounce.