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The price of Bitcoin has registered a sharp increase in the last 24 hours, supported by the renewed optimism of investors. The coin traded at $72,521, holding above the critical support level of $72,294.
Although this rally offers a glimmer of hope for short-term gains, the macro outlook remains a source of concern, prompting many to be cautious about Bitcoin’s next move.
Bitcoin history points to more declines ahead
The % of supply in the profit indicator has recently fallen below the -1 standard deviation limit, settling at around 57%. This decrease indicates that fewer Bitcoin holders are making profits compared to previous periods, which historically has signaled the beginning of a deep bear market. Similar readings were observed in May 2022 and November 2018, where Bitcoin prices saw significant drops.
When the % supply in profit deteriorates, it reflects an increase in the number of loss takers-investors who bought Bitcoin at higher prices and are now holding a loss.
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Typically, this situation leads to sustained selling pressure, making the consolidation phase less likely to be a starting point for a recovery. Instead, it suggests that Bitcoin may be subject to a prolonged negative market period, with downward pressure continuing in the medium term.
The on-chain cost basis intervals for short-term Bitcoin holders (STH CBB) provide another worrying signal. Historically, these bands have marked the bottom areas when the price falls below the lower band, especially during the big corrections like June 2022 and March 2020. A reversal often occurs when the STH price obtained turns into support, which can be a signal of the beginning of a price recovery.
Currently, the realized STH price is around $87,434. If the price of Bitcoin moves towards this level, it could lead to an increase in sales, as short holders may seek to liquidate their holdings at the break-even point.
This adds an extra layer of concern, as it could hinder any real recovery by putting downward pressure on the price. If Bitcoin rises to its purchase price realized for short-term holders, it can meet resistance, making a continuation of the rally more challenging.
BTC price is racing, but can it work?
Bitcoin price at the time of writing is $ 72 521, and remains above the critical level $ 72 294. Ensuring this support is key to any potential recovery. However, bearish signs suggest that this recovery may be delayed, as several factors point to continued pressure from sellers.
If the downtrend continues, Bitcoin will probably have difficulty breaking the resistance level at $75,000. In this scenario, Bitcoin could continue to fall, and may reach $70,000 or even fall below $65,000. The prevailing market conditions suggest that Bitcoin may find it difficult to gain upward momentum without a major change in investor sentiment.
However, if the buyers can take control of the market in the short term, Bitcoin could see a demonstration beyond $75,000. If the level of $78,363 is violated, the bearish view will be invalidated, indicating a possible shift towards higher prices. However, $75,000 remains a psychological barrier, and Bitcoin may face panic selling as it attempts to cross this critical level.
