Bulls and Bears Fight for Control of Bitcoin (BTC) Market

Bitcoin (BTC) has been trading in a tight range since August 29. It faces strong resistance at $111,961, while support is at $107,557.

Let's figure out what's happening in the Bitcoin (BTC) market and what to expect from the cryptocurrency price.

Bitcoin Futures Traders Double Down

The rise in the Estimated Leverage Ratio (ELR) on crypto exchanges reflects growing investor confidence and risk appetite, even as the coin’s performance has been weak. According to CryptoQuant, BTC’s ELR has been steadily rising since August 12. Shortly thereafter, Bitcoin hit an all-time high of $123,731, before beginning a decline that has continued ever since.

Despite the difficulties in restoring the upward trend, the leverage in the derivatives market continues to grow. This shows that traders are not afraid of short-term corrections and are increasing their investments in the coin. The growth of ELR in the conditions of weak price dynamics indicates that traders are not leaving the market, but increasing their risky investments.

Bitcoin Leverage Ratio Estimate. Source: CryptoQuant

Why Bitcoin's Bull Cycle May Just Be Beginning

In a new report, anonymous CryptoQuant analyst PelinayPA noted that the market may be in a “mean bull” cycle phase, where price movements typically accelerate.

This is based on the Net Unrealized Profit/Loss (NUPL) metric for Bitcoin, which PelinayPA says is 0.52. NUPL shows whether the market is in profit or loss, helping to identify phases of the market cycle.

NUPL chart for Bitcoin. Source: CryptoQuant

Historical data shows that NUPL values between 0.7 and 0.8 coincided with BTC market peaks in 2013, 2017, and 2021.

“The market is currently in a 'faith and optimism' phase, which usually corresponds to the middle stage of a bull cycle. Historical data shows that Bitcoin could reach $120,000 – $150,000 in the near future,” PelinayPA noted.

This indicates that while BTC has not yet reached its all-time highs, it is already entering a phase where momentum is starting to build again.