Bitcoin loses $6K but metrics point to bullish trend

Bitcoin (CRYPTO:BTC) experienced a sharp decline, losing over $6,000 in hours after being rejected at $99,000.

This correction came after a three-week surge, where Bitcoin rose from below $70,000 to nearly $100,000.

According to CryptoQuant analysts, profit-taking by Short-Term Holders (STH) played a significant role in the pullback.

These holders saw gains of 40-50% in weeks, prompting sales.

The Fear and Greed Index, reflecting market sentiment, had also been in "greed" territory for weeks, signaling a potential local top.

Analysts on X indicated that such corrections are common after substantial rallies, noting that Bitcoin has faced steeper drops in prior bull cycles.

MAC_D, a CryptoQuant analyst, attributed the decline to "leverage overheating," with open interest and leverage ratios hitting annual highs.

They emphasised that corrections of up to 20% are "a natural phenomenon" in bullish markets.

Despite the decline, key metrics suggest the bull market remains intact.

"Cycle metrics such as MVRV, NUPL, and Puell Multiple still indicate that Bitcoin is in a bull market with upward potential," MAC_D noted.

The analyst also highlighted the significance of accumulation periods during corrections, with the Short-Term SOPR metric rising to 1.1, signaling that STHs were realising profits, which could benefit Bitcoin.

"Historical patterns show that when short-term investors sell Bitcoin at a loss, it often leads to a rebound," MAC_D added.

Whale activity also indicates confidence in Bitcoin's trajectory.

Lookonchain reported that five wallets withdrew $86.4 million in BTC from Binance before the crash.

Additionally, MicroStrategy announced a $5.5 billion purchase, increasing its holdings to nearly 387,000 BTC.

Based on these factors, analysts believe Bitcoin’s long-term bullish trend remains supported by strong on-chain metrics and accumulation.

At the time of reporting, the Bitcoin (BTC) price was $91,783.87.