Bitcoin’s price experienced a breakout rise in the last 24 hours, fueled by renewed optimism from investors. The cryptocurrency traded at $72,521, holding above the critical $72,294 support level.
While this uptick offers a glimmer of hope for short-term gains, the macro outlook remains a concern, leaving many cautious about Bitcoin’s next move.
Bitcoin’s Past Suggests Further Decline Ahead
The Percent of Supply in Profit metric has recently broken below its -1 standard deviation threshold, sitting at approximately 57%. This drop indicates that fewer Bitcoin holders are in profit compared to previous periods, which historically signals the early stages of a deep bear market. Similar readings were observed in May 2022 and November 2018, marking significant declines in Bitcoin’s price.
When the Percent of Supply in Profit deteriorates, it reflects a growing number of underwater holders—investors who purchased Bitcoin at higher prices and are now holding losses.
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Bitcoin STH Cost Basis Bands. Source: TradingViewThis condition typically triggers sustained selling pressure, making the consolidation phase less likely to be a springboard for a market recovery. Instead, it suggests that Bitcoin might be in a prolonged adverse market regime, with continued downward pressure in the medium term.
STHs’ Rising Profits Could Impact Bitcoin Negatively
The STH (Short-Term Holder) On-Chain Cost Basis Bands (CBB) provide another concerning signal for Bitcoin. Historically, these bands have marked bottoming points when the price slid below the low band, particularly during major corrections like in June 2022 and March 2020. A reversal typically occurs once the STH Realized Price flips into support, signaling a potential price recovery.
Currently, the STH realized price sits at approximately $87,434. If Bitcoin’s price moves towards this level, it could lead to increased selling activity, as short-term holders may look to liquidate their holdings at breakeven.
Bitcoin Supply Profitability State. Source: TradingViewThis creates an additional layer of concern, as it could impede any meaningful recovery by placing downward pressure on the price. If Bitcoin rises to the STH realized price, it may face resistance, making a sustained rally more challenging.
BTC Price Is Escaping, But Can It Succeed?
At the time of writing, Bitcoin is priced at $72,521, holding above the critical $72,294 level. Securing this support is essential for any potential recovery. However, bearish cues suggest that this recovery might be delayed, as many factors point toward ongoing pressure from sellers.
If the bearish trend continues, Bitcoin may struggle to break through the $75,000 resistance level. In this scenario, Bitcoin could face further declines, possibly reaching $70,000 or even dipping below $65,000. The prevailing market conditions suggest that Bitcoin may have difficulty gaining upward momentum without a significant shift in investor sentiment.
Bitcoin Price Analysis. Source: TradingViewHowever, if the bulls manage to take control in the short term, Bitcoin could see a rise past the $75,000 level. A breakthrough above $78,363 would invalidate the bearish thesis, signaling a potential shift toward higher prices. Yet, $75,000 remains a psychological barrier, and Bitcoin could face panic selling as it attempts to breach this critical level.
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Source: https://beincrypto.com/bitcoin-price-crosses-70000-yet-it-faces-risk-of-selling-pressure/
