- Summary:
- With 71 percent of investors having held it for over a year, the allure to sell is palpable. But does it mean Bitcoin price is in a reversal?
Bitcoin price came so close, yet it has suddenly found itself so far from the somewhat fantasy $100k price park. The crypto market’s largest asset broke below the $92k mark for the first time in five days on Tuesday, effectively establishing its next critical support at the psychological $90k level.
It Could Get Worse Before It Gets Better for BTC Price
BTC price had recovered slightly to trade at $92,499 at the time of writing, but was still down by 0.5 percent on the daily chart, underlining its weakening traction. For all its troubles, Bitcoin price momentum is still leaning to the upside, with the Relative Strength Index (RSI) reading at 62 on the daily chart.
However, a shorter timeframe shows us that it could get worse before it gets better for Bitcoin price. On the four-hour chart, the RSI has recently assumed a downward trajectory corresponding to the price decline. However, the Average Directional Index (ADX) is at 27 and rising. That shows that the downward trend is strengthening.
The current decline is driven by profit taking by long-term BTC holders. According to IntoTheBlock, 71% of Bitcoin investors have held it for more than a year. Therefore, with BTC having risen by 146% in the last year, the motivation to take profit is palpable.
On the other hand, however, the number of whale transactions (transactions exceeding $100k) have risen in the last 2 two days from 9,585 to 13,037. This signifies rising interest in the coin, which could support price recovery. Also, MicroStrategy’s purchase of $5.4 billion of BTC near the $98k mark adds strong credence to the demand side.
Bitcoin price prediction
Pivot: Bitcoin price pivots at 91,740. The upside will prevail if the price action stays above that mark. Otherwise, the bears will carry the day.
Support: With the RSI signaling bearish-leaning momentum, the price is likely to move to the first support at 91,310. However, a stronger downward momentum could break below that mark and test 90,795.
Resistance: The first resistance is likely to be at 93,375. However, extended control could clear that barrier. Such a move would invalidate the downside narrative and potentially test 93,000.
