- Bitcoin price action seems to be stuck between two crucial hurdles at $35,000 and $44,000.
- On-chain metrics do not paint a clear picture as they did but suggest that bulls are hanging on.
- A daily candlestick close above $52,000 will invalidate any bearish outlook and hint at the potential start of a bull run.
Bitcoin price is hovering between a weekly supply and a daily demand zone, leading to a bracketed movement. The recent run-up fell short of retesting the upper boundary and is currently correcting to find a stable support level.
Bitcoin price hopes for bulls’ return
Bitcoin price experienced a solid bounce from the $36,398 to $38,895 demand zone on February 28 and rallied 22%. This uptrend fell short of $138 to retest the weekly supply, extending from $45,550 to $51,860.
Regardless, the bears took over, leading to a 9% downswing so far. A further descent is likely to encounter the upper limit of the demand zone, where BTC is likely to find some sort of support that absorbs the incoming selling pressure.
If buyers make a comeback, there is a good chance Bitcoin price will kick-start another uptrend that attempts to shatter through the weekly supply. A successful bounce that pushes the big crypto to produce a daily candlestick close above $52,000 will create a higher high relative to the December 27 swing high, indicating the potential start of an uptrend.
This development will open the path for investors to expect Bitcoin price to head back to $60,000 or set a new all-time high at $80,000.
BTC/USDT 1-day chart
This optimistic scenario assumes that Bitcoin price does not shatter the daily demand zone. IntoTheBlock’s Global In/Out of the Money (GIOM) model, indicates that a key point to overcome for this outlook is $44,073. Here, roughly 2.19 million addresses that purchased $1.5 million BTC are underwater.
A move beyond the average buy-in price would alleviate the selling pressure from “Out of the Money” investors trying to break even. Clearing this hurdle would open the gate for BTC to push to $50,000, which is the next cluster of underwater investors.
The resistance level at $44,073 is relatively weaker compared to the support area, indicating that a minor spike in bullish momentum could be enough to start a more profitable uptrend.
Further highlighting Bitcoin’s sideways movement is the 30-day Market Value to Realized Value (MVRV) model, which is hovering close to 0%. This on-chain metric is used to determine the average profit/loss of investors that purchased BTC over the past month.
For the past year, the 30-day has been accurate in predicting a local top. Any move into the 7% to 20% area would indicate a potential local top formation, leading to a quick retracement. The recent rally of Bitcoin pushed the MVRV to 7.3% and the formation of a local high, indicating that investors are quick to book profits due to the uncertainty in global markets because of the war between Russia and Ukraine.
BTC 30-day MVRV
While these indicators are accurate for analyzing the short-term outlook, the supply on exchanges index can be used to determine the overall health of the long-term investors/holders. The total number of BTC held on exchanges has dropped from 2.64 million to 2.05 million over the past year.
Roughly 590,000 BTC tokens have moved out of exchanges and into cold storage wallets or interest-earning platforms, suggesting that these holders are optimistic about the future of Bitcoin and less likely to sell.
BTC supply on exchanges
While things are looking relatively safe for Bitcoin price, a breakdown of the $36,698 to $38,889 demand zone will pose a serious threat to the upswing. In this case, if BTC produces a weekly candlestick close below $39,481, it will create a lower low and hint at a continuation of the downtrend.
In this situation, BTC could crash to $29,100, where quite a bit of the sell-stop liquidity is present below it. This might lead market makers to knock the big crypto for a run below this level to acquire tokens at a discount.
However, based on GIOM, the immediate support level extends from $11,401 to $35,891, where roughly 5.04 million addresses purchased roughly 2.42 million BTC at an average price of $22,589. Therefore, a threat of a steep correction to $22,589 is also plausible, especially if the tussle between Russia and Ukraine escalates and becomes ‘nuclear’.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
Ethereum whales turn bullish with Shanghai upgrade less than a month away
Ethereum (ETH) whales holding between 1,000 and 10,000 ETH have been scooping up the altcoin consistently for a week. With the countdown to the Shanghai upgrade and the ETH token unlock event, there is a spike in Ethereum demand among retail investors.
Ripple price to close the week with a bang as next week will be crucial for another 20% profit
Ripple price is closing this week with very profitable numbers, even if a fade is ongoing. The fade occurred after bulls received a firm rejection at $0.50 and have been trading lower from that level since. If bulls can keep their hands on this momentum and the Relative Strength Index (RSI) is not overbought, at least some 20% profit is being prepared for next week.
Will Cardano price advance as analysts call it one of the favorite altcoins next to EOS and COLT to pop?
Cardano (ADA) price is making the cut and has been shortlisted by several analysts that have put ADA in their top altcoin, primed to explode to the upside soon. ADA is flirting with a second week of gains and could recover its attempt to hit $0.415 as a crucial level for any further uptrend or downtrend.
Is the new partnering-up strategy the right way for Vechain price to avoid a 30% correction?
Vechain (VET) price had a busy week as several new partnerships were announced. Next to integrating with Dappradar to promote cross-chain visibility, the partnership with Boston Consulting Group might be the one that draws the most attention. Vechain price though is not taking this news in a good way and rather is at risk of tanking further.
Bitcoin: Should you trust this BTC sell signal or wait for $34,000?
Bitcoin price shows a clear picture of its rally after it breached a long-term bullish pattern in mid-January. As the rally takes a breather, sell signs have started to emerge, which is putting investors in a confused state.