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Bitcoin had a very volatile trading session yesterday, with prices oscillating between $92,300 and $96,420 throughout the day. The cryptocurrency is now hovering near the $93,000 level, and is struggling to define a clear trend in the short term. As market participants wait for decisive action, uncertainty looms over whether Bitcoin will maintain its bullish structure or face a deeper correction.
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CryptoQuant analyst Axel Adler recently shared valuable insights, highlighting an important trend among short-term (STH) holders. According to Adler, these investors continue to sell their coins at high profit margins, taking advantage of Bitcoin’s recent upward momentum. While profit taking is a natural part of market cycles, the lack of consistent demand to absorb this selling pressure may pose a challenge to Bitcoin price stability.
If demand fails to keep up with the pace of active profit taking, a local correction may occur, which could lead to a decline in the price of Bitcoin. This delicate balance between profit taking and market demand makes the coming days crucial to determining Bitcoin’s next move. Will buyers step in to support the price, or will selling pressure lead to a deeper bounce? Investors and analysts are watching closely as Bitcoin navigates this pivotal moment.
Response of Bitcoin demand levels
Bitcoin has faced days of extreme volatility as it struggles to break through the $100,000 psychological barrier while holding above the $92,000 support level. The market remains in a state of flux, with investors and analysts closely monitoring Bitcoin’s next move. Despite the uncertainty, Bitcoin’s resilience at these key levels highlights the ongoing tug of war between bullish and bearish forces.
Chief Analyst Axel Adler I recently shared an insightful analysis about Xshedding light on the behavior of short term holders (STHs). According to Adler, STHs are actively selling their coins at high profit margins, taking advantage of recent price spikes. While profit taking is a normal part of market cycles, the lack of consistent demand to counter this selling pressure could lead to a local correction and potential price decline.
However, if prices decline, STH is unlikely to continue selling its holdings, as selling at a loss in a bull market is often considered an unwise move. This dynamic could provide Bitcoin with the breathing room needed to stabilize at key support levels, which are currently around $90,000.
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If Bitcoin manages to hold above $90,000, a period of consolidation around this level could create the basis for the next rally, which could push Bitcoin to all-time highs. The coming days will be crucial in determining whether Bitcoin will continue its rise or face a temporary setback.
BTC holding exceeds $90,000
Bitcoin is trading at $93,800 after long days of selling pressure and uncertainty in the market. Despite holding above the key support level at $92,000, a loss of both the 200 4-hour moving average (MA) and the exponential moving average (EMA) is a bearish signal in the short term. These indicators, which are often viewed as measures of market momentum, suggest that Bitcoin may need additional demand to regain upward momentum.
For the bulls to regain control and ignite a new rally, Bitcoin must regain these critical levels. The 200 4-hour EMA at $96,500 and the 200 4-hour EMA at $98,500 are key hurdles. Success in crossing these thresholds and securing a decisive close behind them would confirm renewed bullish momentum.
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If Bitcoin achieves this feat, the way could be set for a massive surge in price discovery, breaking through psychological barriers like $100,000 and paving the way for all-time highs. On the other hand, failure to recover these indicators may indicate an extended consolidation or a potential retest of lower support levels.
Featured image by Dall-E, chart from TradingView
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