Bitcoin (BTC) Faces Bearish Pressure as Price Drops Below Realized Price
Bitcoin (BTC) has dipped below its realized price, diminishing hopes for a swift recovery to the $72,000 level. The current price is at $68,608, indicating potential for a prolonged bearish trend as metrics show selling pressure and decreased whale accumulation. Technical analysis suggests further declines toward $66,000 or even $62,000 are possible unless market conditions improve.
Bitcoin (BTC) has recently fallen beneath its realized price, a critical metric representing the average acquisition cost of all circulating coins. This decline has dampened prospects for a rapid recovery towards the $72,000 mark, as such a breach often indicates growing selling pressure. With Bitcoin’s current price at $68,608, ongoing trading below this pivotal level raises concerns about a potential extended bearish trend. The pertinent question arises: How far can BTC decline? On October 20, Bitcoin descended below its realized price, leading to a subsequent drop in value from $69,022 to $66,611 within a matter of three days. On October 28, the realized price fell below the spot value, and while BTC experienced a temporary rally to $72,708 shortly thereafter, the anticipated sustained upward momentum did not materialize. Data collected from CryptoQuant indicates that Bitcoin’s realized price stands at $69,352, exceeding its current price, which traditionally would provide a support mechanism. However, with the realized price now situated above market value, the likelihood of a short-term recovery to the $72,000 threshold seems diminished. Another detrimental indicator for Bitcoin’s rebound potential is the netflow of large holders. This metric accounts for the activities of cryptocurrency addresses that hold between 0.1% and 1% of the total circulating supply. Positive netflow generally reflects accumulation by crypto whales, which often leads to price increases. Currently, however, figures from IntoTheBlock reveal a reduction in netflow, signifying that these large holders have sold more than they have accumulated within the past week. If this trend persists, it may correlate with Bitcoin’s realized price positioning and forecast further declines. Bitcoin’s present trading level represents a 6% decline from its recent local peak, and it appears to be on the verge of penetrating below an ascending channel observed on the daily chart. This channel comprises two upward trendlines demarcating resistance at the upper boundary and support at the lower boundary. Presently, Bitcoin is trading precariously close to the support level at $67,941. Should BTC breach this support, it could potentially decline to $66,575, with a more ominous projection suggesting a drop to $62,826. Alternatively, should Bitcoin’s realized price dip below its present figure, it might indicate a trend reversal. In such a scenario, BTC may potentially rally towards $72,770, possibly initiating a trajectory toward a new all-time high.
Bitcoin, the premier cryptocurrency, utilizes a metric known as the realized price to gauge the average cost at which current coins were acquired. The significance of this metric lies in its capacity to indicate market sentiment; when the trading price is below the realized price, it typically suggests that market participants are experiencing losses and may lead to increased selling pressure. Conversely, when the price is above the realized price, it often indicates profitability, potentially driving upward momentum. Recent trading patterns and on-chain metrics are critical in predicting Bitcoin’s price movements and identifying potential support and resistance levels as traders assess future trends.
In summary, Bitcoin’s recent drop below its realized price raises concerns about the cryptocurrency’s immediate recovery potential towards the $72,000 mark. The analysis of its price movements, the activities of large holders, and the dynamics of the realized price suggest a possibly extended period of bearish sentiment. If current trends continue, Bitcoin could experience significant price declines. Nonetheless, a future reversal indicating a recovery towards previous highs remains plausible if the market conditions shift favorably.
Original Source: beincrypto.com
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