Journalist
Posted:
Bitcoin [BTC] has witnessed significant short-term volatility since Monday, the 24th of February. During the past five days, it fell from $66.6k to $62.5k and rallied to $70k on the 25th of February.
At the time of writing, this rally was being retraced, with BTC trading at $66k, down 3.25% in 24 hours.
The crypto market participants were quick to attribute the volatility to Jane Street, Wintermute, and other unnamed macro hedge funds. But AMBCrypto pointed out that the current long-term sell-off did not begin in February.
It traced back to the events of 10/10, and the losses since then were part of a cyclical reset. The selling pressure is easing, but the transition to a market-wide reaccumulation appears far away.
The negative funding rates in February reinforced the idea that bears retained control of the market. Market sentiment was weak, and price bounces have been sold off.
Solving the diverging Bitcoin cycle indicators
Crypto analyst Axel Adler Jr pointed out the anomalous MVRV-Z score. This metric measures the normalized deviation of market capitalization from realized capitalization. Negative values signal the market price was under the on-chain “fair value price”.
At the time of writing, the MVRV Z-score was at -2.28, having dropped to a local minimum of -3.38 on the 5th of February. For context, the December 2018 bottom saw scores of around -1.6. It was -1.4 in November 2022.
The analyst concluded that the market is in a statistically unusual compression zone relativ