Summary
- CryptoQuant said the Bitcoin market has exited its bear phase and entered a neutral zone after undergoing large-scale deleveraging and capitulation.
- It said on-chain indicators aSOPR and STH-SOPR had settled near 1.0, while funding rates were close to zero, showing that extreme greed and fear had faded.
- The contributor said the market has moved past capitulation and entered a clear neutral phase, making this a more favorable time to increase a spot-focused portfolio than to use aggressive leverage.
Forecast Trend Report by Period
Bitcoin has emerged from a bear market and entered a neutral phase, according to CryptoQuant, an on-chain cryptocurrency analytics firm.
In a report published on May 9, CryptoQuant contributor Easy on Chain wrote that the Bitcoin market had absorbed the shock from large-scale liquidations in the first quarter and settled into a healthy correction after speculative excess was flushed out.
The report said Bitcoin open interest has fallen more than 55% from its March peak, signaling a broad deleveraging process. It also noted that in January, the short-term holder spent output profit ratio, or STH-SOPR, dropped to 0.9215, indicating a capitulation phase in which investors sold at a loss.
Easy on Chain said speculative froth had cooled as of May. As of May 7, aSOPR stood at 1.0008 and STH-SOPR was 1.0037, both hovering near the equilibrium level of 1.0. That indicates extreme greed and fear have faded from the market.
Funding rates were also close to zero, a positive sign that fear of missing out, or FOMO, has largely disappeared.
On strategy, the contributor recommended increasing exposure to spot holdings. With the market already past capitulation and in a clear neutral phase, this is a more favorable time to build a spot-focused portfolio than to use aggressive leverage through derivatives.
Uk Jin
wook9629@bloomingbit.ioH3LLO, World! I am Uk Jin.
