Betting on Bitcoin before it reclaims the $98,000 mark might not be the best idea, following the asset’s recent downturn, according to analysts at investment bank Compass Point.
That’s the current average cost for short-term holders, who have held the digital asset for less than 155 days—and are typically sensitive to price swings—they wrote in a Wednesday note.
“One of the defining features of Bitcoin bear markets is promising relief rallies followed by violent sell-offs,” they wrote. “Last week's rally was BTC's strongest recovery since falling below the Short-term Holders' cost basis on 10/30.”
Compass Point signaled that it would feel “more comfortable buying the dip” if Bitcoin’s price fell toward $80,000, but it warned that funding rates for perpetual futures remain elevated at 10%, suggesting that market participants are stepping in to buy Bitcoin with borrowed funds.
