[Analysis] "Bitcoin, on-chain indicators indicate potential for further decline"

Bitcoin (BTC) is attempting short-term stabilization in the $90,000 range, but on-chain indicators still appear to warn of a high risk of correction.

According to on-chain analytics firm CryptoQuant, the "Risk-Off" model, which integrates six indicators including downside/upside volatility, net exchange inflows, funding rate, futures open interest (OI), and market cap behavior, has recently approached the 60 line and entered a high-risk zone. Since higher model values indicate greater market vulnerability, the assessment is that the possibility of a short-term correction remains high.

Axel Adler Jr., an analyst at CryptoQuant, analyzed, "The profit-and-loss score has fallen to around -3. This is a level that has been observed in past bear markets or long correction phases." He explained that the current drawdown (about 30%) has exceeded the typical cycle correction range (20~25%), but remains above the drawdown (50~70%) considered a panic selling zone, placing it in an "intermediate vulnerability zone."

Analyst Adler warned, "The risk of further decline is large until signals of macro environment improvement and on-chain profitability recovery appear," adding, "Even though the price is holding at the $90,000 level, one should remain cautious."

On-chain data also captured modest positive signals. Glassnode said that the magnitude of realized losses during this decline reached the largest level since the 2022 FTX collapse. Most losses occurred among short-term holders (STH), while losses by long-term holders (LTH) were limited. Glassnode assessed, "The resilient holding pattern of LTHs has acted to buffer additional panic selling in several past cycles."

Whether the psychological resistance level of $100,000 is breached was also identified as an important inflection point. CryptoQuant said, "$100,000 is a key zone that separates market sentiment," and added, "Whether the U.S. Federal Reserve (Fed) cuts rates in December could act as momentum for a breakout." However, it analyzed that the difference in growth rate of realized value relative to market cap (an MVRV-based extended indicator) remains in a contraction phase at -0.00095, signaling strong structural weakness.

Renowned Bitcoin futures trader Byzantine General said, "Bitcoin is hesitating at a key resistance zone," and projected, "If it breaks above this zone upward, it could quickly run to $100,000, but if resisted, a $92,000~$82,000 box range would continue."