according to Data from CoinMarketCapBitcoin (BTC) has had a rough start to September, falling 8.16% in the past seven days. While the leading cryptocurrency has shown some signs of recovery in the last day, there is still a lot of uncertainty surrounding the Bitcoin market. Commenting on Bitcoin’s potential next move, popular analyst Ali Martinez has issued a strong warning to investors.
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Analyst: Bitcoin Should Avoid Drop to $51,600
in X Post SaturdayAli Martinez has issued a red alert for traders, noting that when Bitcoin’s price drops below the price-to-realization ratio, it often leads to an extended price-to-realization decline.
The Realized Price to Vitality Ratio is a market metric used to assess when BTC may be overvalued or undervalued. As the name suggests, it is calculated by dividing the realized price, which is the average price at which all circulating bitcoins were purchased, by the activity, which is a measure of the activity of the Bitcoin network.
According to Martinez, Bitcoin’s current realized price-to-activity ratio is $51,600. Based on historical data, if the leading cryptocurrency drops below this level, it will likely enter a period of massive selling pressure, dropping to its current realized price of around $31,500.
So far, Bitcoin has had a turbulent September, falling from $59,000 to under $54,000 in the first week of the month. However, the digital asset has shown little resilience since then, rising more than 2% to nearly $55,000 on Saturday. While this slight price rise could lead to an upward trajectory, investors should note that September is traditionally a bearish month for Bitcoin, with an average loss of 4.78% over the past 11 years.
Bitcoin Still Far From ‘Seller Exhaustion’ Levels, Price Reversal Could Delay
In other news, Rekt Capital, another cryptocurrency analysis firm, Stated Bitcoin sales volume is currently far from “seller exhaustion levels” amid the recent price decline and increased volatility levels. Therefore, the digital asset is likely to see further price losses before the market recovery “takes off.”
At the time of writing, Bitcoin is trading at $54,009, reflecting a 0.45% increase in the last 24 hours. Meanwhile, the daily trading volume of the coin has decreased by 60.39% and it is currently valued at $19.41 billion. It is worth noting that Bitcoin is currently in a strong support zone, a bounce from which could push the asset’s price to $60,000, indicating a potential 11% increase in its current price.
Featured image from StormGain, chart from Tradingview