Bitcoin price fluctuates between the weekly supply and daily demand zone, resulting in a ranged movement. The recent spike failed to retest the upper limit and is currently correcting to find stable support. So, what levels are next? Analyst Akash Girimath conveyed what investors should expect.
Bitcoin price hopes for bulls return: $80,000 is on the cards
Bitcoin price had a solid bounce from $36,398 to $38,895 on February 28 and rallied 22 percent. This uptrend broke below $138 to retest weekly supply and rallied from $45,550 to $51,860. “Whatever happens, the bears have taken over and have led to a 9 percent drop so far,” Girimath said, pointing to the recent drop. Further declines are likely with the upper bound of the demand zone, which is likely to find some kind of support that absorbs the incoming selling pressure.
If the buyers turn back, there is a good chance that the Bitcoin price will start another uptrend trying to smash the weekly supply. A successful bounce that propels the major crypto to produce a daily candlestick above $52,000 will create a higher high than the December 27 high, marking the start of a potential uptrend, according to Girimath. This development will pave the way for investors to wait for the Bitcoin price to return to $60,000 or set an all-time high at $80,000.
What do other metrics show for BTC?
This optimistic scenario assumes that Bitcoin price does not smash the daily demand zone. IntoTheBlock’s Global Money In/Out (GIOM) model shows $44,073 as the key crossover for this look. Here, about 2.19 million addresses that bought $1.5 million worth of BTC are at a loss. According to the analyst, a move beyond the average purchase price will ease the selling pressure of “Non-Money” investors trying to reach the breakeven. Breaking this hurdle will open the door for BTC to push the next cluster of underwater investors to $50,000.
“The resistance level at $44,073 is relatively weak compared to the support area, indicating that a small increase in bullish momentum may be enough to start a more profitable uptrend,” Girimath says.
MVRV model determines profit and loss in Bitcoin
Further highlighting Bitcoin’s sideways movement is the 30-day Market Cap and Realized Value (MVRV) pattern, which hovers close to 0 percent. These ten chain metrics are used to determine the average profit/loss of traders who bought BTC in the past month. For the past year, he was right when he predicted a 30-day local peak. Any move to the 7 percent to 20 percent area indicates the formation of a potential local top leading to a rapid pullback. Bitcoin’s recent rally pushed MVRV to 7.3 percent and a local high formation, indicating that investors are quick to take profits amid uncertainty in global markets due to the war between Russia and Ukraine.
While these indicators are accurate for analyzing the short-term outlook, the stock market supply index can be used to determine the overall health of long-term investors/holders, according to Girimath. The total number of BTC held on exchanges fell from 2.64 million last year to 2.05 million. Roughly 590,000 BTC have moved from exchanges to cold storage wallets or interest-bearing platforms, suggesting that these holders are optimistic about Bitcoin’s future and are less likely to sell.
What could be the threatening events in the Bitcoin price?
According to the analyst, while things look relatively safe for Bitcoin price, a breakout of the $36,698 to $38,889 demand zone would pose a serious threat to the uptrend. In this case, if BTC produces a weekly candlestick below $39,481, it will create a lower low and give a hint that the downtrend is continuing. The expert says that in this case, BTC could drop to $29,100, below which there is quite a lot of sell-stop liquidity.
According to GIOM, the immediate support level ranges from $11,401 to $35,891, where roughly 5.04 million addresses bought about 2.42 million BTC at an average price of $22,589. Therefore, the threat of a steep correction to $22,589 is also reasonable, especially if the contention between Russia and Ukraine escalates and becomes “nuclear,” according to Girimath.