Bitcoin Market Index Rebounds 70% in 7 Days Amid Cautious Accumulation

Bitcoin’s Combined Market Index (BCMI) has shown a significant rebound, with its 7-day Simple Moving Average (SMA) rising to approximately 0.6. This increase suggests a shift in market sentiment towards cautious optimism. The recovery is accompanied by a slowdown in profit-taking and improvements in core on-chain metrics. However, the long-term outlook remains more restrained, with the 90-day SMA holding steady near 0.45, indicating a neutral market state far from an overheated zone.

The NVT Golden Cross has plummeted by 78.68% to 0.29, signaling that the market may have exited a local top. Simultaneously, the standard NVT Ratio has decreased by 13.1% to 27.37, indicating stronger transaction volume relative to market capitalization. These declines suggest a valuation reset and improving organic network activity, making the BCMI’s uptrend feel more grounded in fundamentals rather than artificial.

Bitcoin’s total Exchange Reserve has dropped by 1.36% to $263.45 billion, indicating slight outflows. Historically, decreasing reserves imply accumulation as coins move off exchanges into long-term storage. However, the scale of outflows remains modest, suggesting low market conviction. This cautious accumulation aligns with the muted tone of the 90-day BCMI SMA, indicating that while accumulation may be starting, it is happening cautiously.

As of the 29th of May, the Long/Short Ratio decreased to 0.886, with short positions comprising 53.01% of the total. This indicates that traders are still leaning bearish despite improving sentiment signals. When shorts dominate in such conditions, it raises the risk of a short squeeze if the price unexpectedly moves higher. Therefore, while the BCMI rebound reflects better sentiment, this short-heavy positioning could amplify volatility in either direction. If buyers regain control, the resulting squeeze could push Bitcoin beyond $110K rapidly.

The BCMI’s sharp 7-day rebound, paired with improved NVT ratios and modest reserve outflows, points toward early accumulation. However, stable long-term metrics and prevailing short positions suggest the market remains cautious. A sustainable recovery may be forming, but the signal still requires confirmation from stronger accumulation and price momentum.