Bitcoin Price Analysis: Challenges Ahead as $90k Resistance Looms
Bitcoin currently trades at $87,373, struggling below the $90,000 resistance. The Hash Ribbon buy signal suggests potential price increases, yet selling pressure from short-term holders and decreased liquidity hinder upward movement. Market fluctuations are influenced by the impending expiry of $16.5 billion in Bitcoin options, creating a complex environment for traders.
Bitcoin (BTC) is experiencing volatility, currently trading at $87,373, with significant challenges preventing it from surpassing the $90,000 resistance level. Despite flashing a bullish buy signal from the Hash Ribbon indicator, Bitcoin faces increasing selling pressure from short-term holders, many of whom hold Bitcoin at a loss, amounting to 3.4 million BTC. The market is characterized by a decrease in liquidity, with daily transfer volumes down 47% from recent peaks.
The Hash Ribbon indicator, created by analyst Charles Edwards, identifies bullish trends in Bitcoin’s market by signalling when mining difficulty and hash power have stabilized. This is indicated by the 30-day moving average surpassing the 60-day moving average, marking potential recovery from market stress. Historically, the indicator has had an 85% success rate in forecasting price rallies.
While this positive signal is notable, Bitcoin’s price is under pressure due to significant short-term holders determining market direction. Current market conditions resemble a “top heavy” setup, meaning that a substantial portion of BTC is held by investors who purchased at higher prices. This selling pressure reveals itself through a low accumulation trend score, which indicates distribution over accumulation in recent weeks.
Another obstacle to Bitcoin’s price ascension is reduced market liquidity, evidenced by the drop in daily transfer volumes and active addresses. The Bitcoin futures market has similarly cooled off, with open interest falling 24% and funding rates decreasing, limiting upward price movement.
A notable factor contributing to the current market dynamics is the nearing expiry of $16.5 billion worth of Bitcoin options on March 28. Essential call options indicate potential pressure points at $92,000, while bearish interests aim to push the price down below $84,000 to benefit from put options.
Long-term holders, comprising approximately 40% of Bitcoin’s network wealth, may provide some degree of stability in upcoming market conditions. Their accumulation strategies could potentially catalyze new upward momentum for Bitcoin, depending on broader market fluctuations and demand responses.
In summary, Bitcoin is presently facing numerous challenges, including selling pressures from short-term holders, limited market liquidity, and impending Bitcoin options expiry. The Hash Ribbon indicator offers some optimism; however, the resistance at $90,000 remains a critical barrier. Long-term holders may play a pivotal role in shaping future market trends as they accumulate Bitcoin during this volatile period.
Original Source: coincentral.com
Post Comment