Bitcoin Price Eyes 6% Crash As Investors Realize Gains

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As a seasoned analyst with over two decades of experience in the financial markets, I have seen my fair share of market cycles and trends. The current state of Bitcoin (BTC) is reminiscent of several past instances where we saw similar patterns unfold. While it’s always tempting to predict exact price movements, I would caution against getting too carried away by short-term fluctuations.

The price of Bitcoin (BTC) has fallen beneath a 25-day ascending trendline, which previously functioned as a support point. Over the past few weeks, BTC has repeatedly touched this barrier, but current trends and on-chain signals suggest a potential decline is imminent.

Bitcoin Price Wearkness Could Lead to Crash

As a crypto investor, I’ve noticed that the price of Bitcoin has been consolidating with a positive slope, sandwiched between two ascending trendlines, as illustrated in the chart below. Lately, BTC dipped beneath this crucial threshold following an unsuccessful effort to breach the $100,000 psychological resistance. This trend suggests a surge of bearish sentiment and may prolong the current downtrend.

The 365-day Market Value to Realized Value (MVRV) ratio, which stands at approximately 36.59%, provides additional evidence for this decline. This ratio implies that roughly 36% of Bitcoin investors who purchased the cryptocurrency a year ago are currently in profit, meaning they have unrealized gains. These substantial profits could potentially lead to a market correction if these investors decide to cash out and realize their earnings.

The Network Realized/Profit & Loss (NPL) indicator shows significant spikes following Bitcoin’s second attempt to surpass $100K. These spikes suggest that numerous investors were cashing out their profits, which may have contributed to the resistance against further price increase and could be among the factors causing Bitcoin to decline.

Bitcoin Technical Analysis: BTC’s 6% Crash Likely

Beyond BTC’s value dipping beneath a significant trendline, the Relative Strength Index (RSI) has also fallen below its 50 median point. This decline suggests that the positive momentum is starting to turn negative or bearish. The Awesome Oscillator (AO) aligns with this sentiment by showing decreasing red bars above the zero line. A fall beneath the mean level could potentially spark increased selling pressure and drive Bitcoin’s price down even further.

The $94,875 is first support area, breaching which could knock Bitcoin price down to $92,514. This move would constitute a 6% crash from the current price of $98.065.

As a crypto investor, if Bitcoin’s price bounces off its rising trendline, it suggests a return of buying pressure. If this happens, Bitcoin needs to conquer the $100K barrier and establish a strong support level with a firm weekly candlestick close above it. Under such circumstances, Bitcoin might aim higher and reach a new all-time high at approximately $111,800.

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2024-12-09 15:09