BTC sets new $123K value zone after Leverage Flush

The key takeaways

• Bitcoin traded range-bound above $120,000 following an 8% lever reset for futures.

• A decline in the open interest rate and a spot-demand increase indicate renewed confidence by buyers.

• MVRV signaled an upside of 15% to 25%, with a target range between $140,000 and $150,000 at the end Q4.

BitcoinBTC( ) traded in ranges between $120,000 to $125,000 following a dramatic, but ordered, deleveraging on futures market, indicating that $120,000 might be the key zone of demand for traders over the next few months.

Bitcoins recent rise from $120,000 is a result of the market analyst Skew. underscored Buyer bids in that range. Binance’s data on the spot market showed an increase in the CVD (cumulative volume delta) at the $120,000 level, indicating renewed interest. 

Open interest decreased, indicating that short positions were closed, as the prices recovered.

All of these factors indicate that the market is defining new short-term strategies. “value area” Around $123,000 in the next few weeks, with a heavier level of supply above that range.

Onchain metrics supports this consolidation hypothesis. Analyst Maartunn observed Short-term holders have a nearly equal split of profits and losses. 24,100 BTC were sent at a gain to the exchanges versus 19700 BTC that was lost, “near 50/50 split, but leaning green.” 

Binance also provides data on the following highlighted The recent pullback coincided with a reset of leverage. Bitcoin open interest fell from a high of $15.07 billion to $13.88 million, a 7.9% decrease over the course of three days.

This reduction in leverage reflected a careful repositioning and not a complete exit. However, it may have paved the way for an even more robust advance when fresh capital returns to the market.

Related: Bitcoiners are in profit, but beware of short-term fragility: Glassnode

MVRV analysis shows strong Q4 prospects

Analysts remain optimistic that Bitcoin will continue to grow into the year’s end, despite a short-term consolidation trend. Market strategist Timo Oinonen highlighted MVRV is an important indicator to look at when evaluating potential returns. The MVRV ratio compares Bitcoin’s market capitalization with its realized capitalization. It is a way to determine whether an asset’s value has increased or decreased relative to the cost of its owners.

According to Oinonen, Bitcoin’s MVRV currently suggests a base scenario where prices could climb 15% to 25% toward $140,000–$150,000 by the end of Q4, supported by long-term holder accumulation and resilient short-term cost bases.

BTC may reach up to $170,000 or $200,000 in a bullish scenario. This is based on a MVRV above 4.0 and mirroring the cycles of 2020. The market could be euphoric, with a supply reduction that has been halved.

Related: Bitcoin has 100 days to go ‘parabolic’ or end its bull market: Analysis

The article is not intended to provide investment advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making a final decision.