- Bitcoin’s latest fix could harden a bit as it sits below a major supply barrier and above weak support. The leading cryptocurrency has had an impressive bull rally in the past few months. Since the beginning of September 2020, Bitcoin has seen its market value increase by about 330%.
Bitcoin’s latest fix could harden a bit as it sits below a major supply barrier and above weak support. The leading cryptocurrency has had an impressive bull rally in the past few months. Since the beginning of September 2020, Bitcoin has seen its market value increase by about 330%.
Bitcoin could drop to $ 26,000
The price of BTC rose from below $ 9,800 to its all-time high of $ 42,125.
Given that such a bull did not experience a major correction, multiple on-chain measurements showed that Bitcoin is floating in the overbought territory.
The pessimistic scenario seems to have recently been confirmed after a rise in selling pressure drove prices below a critical support barrier. BTC appears to have dropped below the lower trendline of a symmetrical triangle that has evolved since the January 8th peak.
As Bitcoin broke the $ 33,800 barrier, the SuperTrend indicator signaled a “short” that added confidence to the bearish outlook.
The distance of the widest range of the triangle indicates that the flagship cryptocurrency is ready for a 28% drop. A further increase in sell orders behind this BTC could push the market value to $ 26,000 or less.
IntoTheBlock’s In / Out of the Money Around Price (IOMAP) model shows that Bitcoin can find a certain level of support at $ 31,000.
Here, about 250,000 addresses had previously purchased around 250,000 BTC.
BTC holders in this price range can try to prevent their investment from turning red. They may even try to add more tokens to their assets to allow prices to rise. But given the significant resistance ahead, Bitcoin could bypass this hurdle and reach the triangle’s $ 26,000 target.
There are critical signals
The only way Bitcoin can continue its uptrend is to close the $ 36,000 resistance barrier. However, this will not be easy to do as the IOMAP cohorts show that more than 2.1 million addresses have purchased more than one million tokens at this price level.
It is worth noting that the ongoing narrative about Bitcoin is that big investors are buying a significant number of tokens on each bottom.
However, this only applies to medium-sized whales holding between 1,000 and 10,000 BTC. Addresses of 10,000 to 100,000 BTC have been on a sales spree since mid-November 2020.