Tiger Research: Is now the right time to buy?

Two weeks ago, I wrote that Bitcoin might not have broken the $100,000 mark yet. The price briefly touched $99,000 before falling back and is currently consolidating below $90,000.

Most people are asking the same question: "Is now the right time to buy?"

Firstly: Yes. Buying in batches is appropriate at this time.

But you must set strict stop-loss orders.

This report was written independently by Ryan Yoon.

1. Bitcoin Takes a Break: A Decision Approaching

The price safety level is above $87,900 (active realized price). This is the average cost line for active buyers.

It serves as the break-even point for the entire market. After the crash in 2022, it took a year and a half to recover to this level. With prices rebounding after the decline, the market can finally breathe a sigh of relief.

Keep a close eye on this point. Use it as your stop-loss line.

At the same time, pay attention to the relationship between short-term holders' costs and active realized prices. If the short-term line falls below the active line, the risk will increase rapidly. Currently, such an unfavorable crossover has not yet occurred.

2. Weak signals, high returns

Key on-chain metrics indicate a market pullback, but profit opportunities are high. We are at the bottom of a fair range.

The MVRV Z-Score is at 1.17. It has left the cheap zone, but the upside is limited. Buyers and sellers are mixed here, and growth is slowing. The trend is weak and unclear.

aSOPR remains unchanged at 1.0. Sellers are trading at cost price. They will sell even if the profit is small.

NUPL is 0.36, just within the fair value range. Short-term holders' NUPL is -0.155. New buyers are at a loss. They will sell once the price reaches their cost basis. This confirms weak market sentiment.

In short, holders should sell when they achieve a small profit. However, please note: MVRV near 1.10 is an excellent entry point for long-term buying. The risk is relatively low. Historical data shows a 40% return a year from this point.

3. Do not allow the price to fall below $84,000.

A drop below $84,000 would pose a significant risk and could lead to long-term damage.

The cost base chart shows a thick wall of supply around $84,000 ($83,000 to $85,000). This is the recent buying price for the group. If the price breaks below this level, short-term holders will face deep losses. This could trigger a panic sell-off.

A hard drop below $84,000 would disrupt the market structure. When the price hit $83,000 on December 1st, fear surged. $84,000 is more than just a line on a chart; it's the last line of defense for the group's break-even point.

4. Open Interest: Returning to Lows

Open interest (OI) in the futures market has fallen back to its April lows. This decline suggests that the frenzied leveraged betting has been cleared out.

This sharp decline is good news. Low leverage reduces the risk of a crash or cascading effects. The market has deflated the bubble. Now it can attempt to rise on a solid foundation. We can look for the start of a new trend from this safe base.

5. Buy immediately and strictly adhere to stop-loss orders.

On-chain indicators suggest now is an ideal buying opportunity. The bubble has deflated. The expected return outweighs the risk. Establishing a position now is reasonable.

But if you're risk-averse, don't just buy. Set clear stop-loss orders. The market direction remains unclear.

If the price falls below the active realization price, most active traders will face losses. This will shift market sentiment towards fear, potentially triggering a sharp drop.

Set your stop-loss at $87,900. This allows you to buy on dips, but also reduces risk if the major support level is broken. If the bottom collapses, preserve your cash.

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