Bitcoin stocks that could prove crucial next week

• Bitcoin’s MVRV moving below its 365-day moving average indicates the potential for further decline or the start of a bear market.
• Short-term BTC holders bore 97% of the losses during Monday’s market crash.
• Net stablecoin exchange flow has risen by nearly $2 billion over the past four days, meaning investors could very well buy the dip.
• The Federal Reserve may cut interest rates in September after rising unemployment and the Boston Fed chairman’s interview.

Bitcoin could be set for an interesting week ahead as it struggles to recover from its biggest decline in the current cycle. This reduction was triggered by a number of events, including recession fears, geopolitical tensions in the Middle East and trading in the Japanese yen.

The metrics below reveal key information for investors to watch out for as a new week approaches.

Bitcoin stocks that could prove crucial next week

Bitcoin’s Market Value to Realized Value (MVRV) ratio fell below its 365-day moving average following the market crash, according to CryptoQuant data. In previous times, such a move has triggered new market lows – the COVID market crash in March, the correction in May 2021 and the start of a bear season in November 2021. Therefore, investors need to be cautious, even if the market seems to see an increase in price.

Bitcoin MVRV

Bitcoin plunged 32% – the biggest in the current cycle – as investors realized losses of $1.38 billion – the 13th largest event in history – following the market crash, according to analysts Glassnode. The short-term holder (STH) cohort was the hardest hit, bearing 97% of the loss. The STH Spent Output Profit Ratio (SOPR) also fell to a three-year low, indicating that new investors made a 10% loss on average – only 70 trading days in Bitcoin’s history saw a lower value .

BTC: LTH vs STH Percent Realized Lose

Bitcoin and Ethereum’s open interest (OI) fell by $6 billion individually and their funding ratios turned negative, indicating that long traders closed their positions heavily, while shorts dominated the market. If OI rises and funding rates turn positive for an extended period, it could indicate the potential for a major price reversal.

Ethereum’s exchange stablecoin offering has seen nearly $2 billion in net inflows since the market crashed on April 5, according to CryptoQuant data. At the same time, more than $1.3 billion was moved from the Tether Treasury to exchanges and other addresses, according to Lookonchain data. This suggests that investors and institutions are buying the dip heavily, expecting prices to rebound.

Stablecoin Exchange Netflow

Lower-than-expected U.S. nonfarm payrolls data last Friday showed the jobless rate rose 4.3 percent, fueling fears of a recession. This is evidenced by reports that computer firm Dell and networking firm Cisco plan to lay off 12,500 and 4,000 jobs, respectively. As a result, analysts expect the Federal Reserve to start cutting interest rates in September.

A lower interest rate environment could boost the prices of risk assets such as stocks and cryptocurrency. Therefore, most members of the crypto community expect Bitcoin to perform strongly in the coming months if the Fed cuts rates.

The Bank of England, the People’s Bank of China and the European Central Bank have cut interest rates in recent months, and the Fed is expected to follow suit.

In an interview with the Providence Journal, Boston Fed President Susan Collins said the Federal Reserve could start cutting rates if inflation continues to fall. “If the data continues as I expect, I think it will be appropriate soon to start adjusting the policy and easing how restrictive the policy is,” Collins said.