The crypto market correction led by Bitcoin (BTC) continued into its third day, with the asset experiencing a further 3.5% loss in the past 24 hours, bringing it closer to the $94,000 mark. This week’s price action has seen BTC pare its weekly gains from over 10% to just 3%, as profit-taking on the expected pullback takes hold.
Major Tokens Follow Suit
The correction is not limited to Bitcoin alone, with major tokens such as Solana’s SOL, BNB, Cardano’s ADA, and dogecoin (DOGE) falling by as much as 7% in the past 24 hours. The broad-based CoinDesk 20 (CD20), a liquid index tracking the biggest tokens by market capitalization, minus stablecoins, is down nearly 3%.
Analysts View Correction as Natural Phenomenon
Analysts are viewing this correction as a natural phenomenon, with MAC_D from CryptoQuant noting that "This correction occurred due to leverage overheating, as open interest and estimated leverage ratio reached annual highs. Therefore, a 10-20% correction can be seen as a natural phenomenon."
Short-Term SOPR: A Key Metric for Identifying Accumulation Opportunities
From an on-chain perspective, cycle metrics such as MVRV (Market Value to Replaceable Value), NUPL (Normalized USD Outflow Large Transactions), and Puell Multiple still indicate that Bitcoin is in a bull market with upward potential. The key here is to identify major accumulation periods during corrections, with the "Short-Term SOPR" metric being particularly useful.
What is Short-Term SOPR?
The Short-Term SOPR (Spent Output Profit Ratio) looks at whether people who have owned Bitcoin for a short time are making or losing money when they sell. CryptoQuant defines short-term holders as those who have held BTC for over 1 hour but less than 155 days.
- If the SOPR value is over 1, these holders are thought to be selling their Bitcoin for more than they paid (making a profit).
- If it’s below 1, they’re selling for less (taking a loss).
The SOPR value reached 1.096 last week, showing that short-term holders made money and were inclined to sell — contributing to the current weakness in BTC.
Historical Patterns Indicate Rebound
However, Bitcoin tends to bounce back when short-term holders sell at a loss. And some say this creates a buying opportunity for traders at current levels to reach a potential target of $100,000 and above in the coming weeks.
Market Expert Opinions
- Ruslan Lienkha, chief of markets at YouHodler, shared his insights on the market: "The record inflow of stablecoin capital into Binance indicates that we are likely in the midst of, but not near, the end of the current bull market. Bitcoin is undergoing a corrective phase, likely driven by profit-taking, which may result in the price consolidating before a potential move toward the key psychological level of $100,000."
- Augustine Fan, head of insights at SOFA, also shared his thoughts on the market: "It’s going to be extremely choppy markets for crypto in the near future with BTC technicals flashing extremely overbought levels, against an ‘animal spirit’ charged public that’s developing a FOMO appetite for the asset class."
Potential Targets and Market Volatility
As the market continues to experience volatility, some experts predict a further squeeze on BTC prices to the 120k to 130k area if markets manage to break the 100k wall. However, others are less sanguine about a smooth ride up with asset markets being overbought across the board.
Conclusion
The current market correction is viewed as a natural phenomenon by analysts, who believe that a 10-20% correction can be seen as a normal part of the bull market cycle. The Short-Term SOPR metric is being used to identify major accumulation periods during corrections and create buying opportunities for traders at current levels.
The potential targets for BTC are still set at $100,000 and above, but the road to get there will likely be marked by extreme market volatility. As the market continues to experience ups and downs, one thing remains clear: the crypto market is a wild ride that’s full of surprises.
