Is it time to buy the dip in batches? Bitcoin enters a critical consolidation zone, keep a close eye on the $84,000 “lifeline”

Question

Written by: Ryan Yoon, Tiger Research Analyst

Translated by: Tim, PANews

Two weeks ago, I wrote that Bitcoin might not break through $100,000 just yet. The price briefly touched $99,000 before pulling back. Currently, it is consolidating below $90,000.

At this point, most people are asking the same question: “Is it time to buy the dip?”

Yes, you can start buying in batches. But you must set strict stop-losses.

Bitcoin Enters Consolidation: Key Decision Approaching

The price is holding above $87,900, which is the average cost for active buyers.

The active realized price represents the breakeven point for the entire market. After the market crash in 2022, it took a year and a half to regain this level. As the price bottomed out and recovered, the market could finally breathe a sigh of relief.

Keep a close eye on this level and use it as your baseline.

At the same time, monitor the relationship between the short-term holder cost line and the active realized price line. If the short-term line crosses below the active line, risk will increase rapidly. Currently, this unfavorable crossover has not occurred.

On-chain Signals Weak, but Potential Returns Are Strong

Although key on-chain indicators show a downward trend, the profit opportunity remains high because we are at the bottom of the value zone.

The MVRV Z-Score is currently at 1.17. It has left the cheap price zone but has not surged significantly. As buying and selling forces intertwine, growth is slowing here. The current trend is weak and directionless.

aSOPR (Adjusted Spent Output Profit Ratio) is flat at 1.0. Sellers are trading at cost and are choosing to sell even with minimal profit.

NUPL is at 0.36, just entering the balance zone. Short-term holder NUPL is -0.155, indicating new buyers are at a loss. Once the price touches their cost line, they will sell. This confirms weak market sentiment.

Overall, holders tend to sell when slightly profitable. But note: when MVRV (Market Value to Realized Value ratio) approaches 1.10, it’s an excellent long-term buying opportunity. The risk is low, and historical data shows that, from this point, the average return over the next year is 40%.

Bitcoin’s “Life or Death Line”: $84,000

A drop below $84,000 brings significant risk and could trigger long-term selling.

The cost distribution chart shows a dense buy wall near $84,000 (in the $83,000–$85,000 range), which is the cost area for a large group of recent buyers. If the price loses this level, short-term holders will face deep losses, potentially triggering panic selling.

If Bitcoin drops well below $84,000, it will disrupt the current market structure. On December 1, when the price hit $83,000,

market panic surged sharply. $84,000 is not only a technical level on the chart but also the last line of defense for the breakeven of current holders.

Open Interest: Returns to Lows

Futures market open interest has dropped to its April lows, indicating that the frenzy of leveraged positions has been cleared out.

This sharp decline is good news, as low leverage reduces the risk of a market crash or a series of sharp drops. The market has squeezed out excess froth and is now in a solid position for a potential rise. We can expect a new rally to start from this price zone.

Now Is a Good Time to Buy the Dip, but Set Strict Stop-Losses

On-chain tools show that now is the best time to buy the dip. The market froth has dissipated, and expected returns outweigh the risks. Opening positions now is a wise choice.

But if you are risk-averse, don’t just buy in. Set clear stop-loss levels, as the market trend is still uncertain.

When the price falls below the active realized price, most active traders will be at a loss. This may trigger market panic and could lead to a crash.

Set your stop-loss at $87,900. This way, you can buy in when the price dips and control your risk if the key support level is breached. If support fails, be sure to keep cash on hand.