A comprehensive analysis of Bitcoin's price action, on-chain data, and derivatives indicates that the recent short-term gains have not altered its overall downtrend. The study employs the Japanese Charting method, originally developed at the Dōjima Rice Exchange during the Edo period, to unify visualization of different market indicators. This approach, recognized by FINRA and the SEC, provides cross-domain confluence.
Key Indicators Under Scrutiny
The analysis focuses on Bitcoin's weekly timeframe price including the SMA50 and Anchored VWAP from the Fourth Halving and the latest all-time high. Additionally, it examines Open Interest on the 3-day timeframe, Realized Cap on the weekly timeframe, NUPL (Net Unrealized Profit/Loss), and Supply in Loss. Despite the short-term bounce, most on-chain metrics continue to reflect selling pressure and miner distribution, with no clear reversal signal.
Derivatives Market Also Weak
In the derivatives space, Open Interest (OI) remains elevated without a meaningful price breakout, creating a divergence that often precedes long liquidation cascades. Meanwhile, futures funding rates hover near zero or turn negative, suggesting fragile bullish sentiment and a lean toward short positioning. Analysts warn that any rally is more likely driven by short covering or liquidity grabs than genuine bullish momentum.
Japanese Charting: A Bridge for Cross-Domain Analysis
Dating back to 17th-century Japanese rice futures trading, the Japanese Charting method uses candlesticks to display open, high, low, and close prices. When applied to Bitcoin, it allows on-chain metrics, derivatives data, and price action to be plotted on the same chart, making it easier to identify common support/resistance levels and potential turning points. While the method is recognized by regulators, it does not change the fact that Bitcoin remains in a bearish structure.
Overall, until Bitcoin breaks above key moving averages and VWAP levels and on-chain selling pressure eases, the bearish trend is expected to persist. Investors should remain cautious of a sudden rally reversal and watch for evolving data.