The great Bitcoin bull run of 2024 hit a speed bump this week as the king of cryptocurrencies slid under $94,000, over 6% below its recent brush with the elusive $100,000 milestone. But while profit-taking has put BTC in the red for now, many analysts view this as nothing more than a natural market correction before the next leg up.
Bitcoin’s Dip: Concerning or Par for the Course?
Bitcoin’s drop below $94K marks its lowest level in a week and has dragged the broader crypto market down with it. Major altcoins like Ethereum, BNB, Solana, and Cardano are all nursing losses of 3-7% on the day. The pullback has caused the total crypto market cap to shed over $100 billion in a matter of days.
So is the great 2024 crypto bull market already losing steam? Not necessarily, say analysts. Many view a 10-20% correction from Bitcoin’s recent highs near $100,000 as not just normal but healthy for a sustainable uptrend.
“A 10-20% correction can be seen as a natural phenomenon,” explained CryptoQuant analyst MAC_D. “This correction occurred due to leverage overheating, as open interest and estimated leverage ratio reached annual highs.”
In other words, a short-term shakeout of overleveraged traders may be just what Bitcoin needs to gather steam for another run at $100,000 and beyond. On-chain data seems to support this idea.
On-Chain Metrics Signal Continued Bullishness
Zooming out, key on-chain indicators like MVRV, NUPL, and Puell Multiple suggest this Bitcoin bull market still has room to run. These metrics evaluate factors like how profitable BTC holders are and whether miners are selling more than usual—telltale signs of market tops. So far in 2024, they’re not flashing major warning signs yet.
In fact, one particular on-chain metric may indicate that Bitcoin is currently in a buy zone during this dip. CryptoQuant’s Short-Term SOPR (Spent Output Profit Ratio) dipped below 1 recently, meaning short-term BTC holders are now selling at a loss on average.
“Historical patterns show that when short-term investors sell Bitcoin at a loss, it often leads to a rebound,” MAC_D pointed out. “The key here is to identify major accumulation periods during corrections.”
Stablecoin Inflows Hint at Crypto Buying Power
It’s not just a hunch, either. Data shows huge amounts of “dry powder” flowing into the crypto market recently in the form of stablecoins like Tether and USDC. According to market-watchers, top crypto exchange Binance saw record stablecoin inflows in the days before Bitcoin’s dip, indicating traders were loading up to buy the pullback.
“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,” said Ruslan Lienkha, chief of markets at YouHodler. “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.”
Buckle Up for a Bumpy Ride to $100K
That’s not to say it will be a smooth ride, though. With the crypto market flashing overbought levels after its blistering 2024 rally and hype starting to bubble up among mainstream investors again, volatility is likely to be the name of the game in the coming weeks and months.
“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,” cautioned Augustine Fan, head of insights at SOFA.
In other words, the path to $100K and beyond is likely to be a wild one, with plenty of sudden surges and scary dips along the way. But if bitcoin’s on-chain vital signs are any indication, the diagnosis for BTC by year’s end still looks promising—it just might take a strong stomach to HODL on for the ride.
