Bitcoin’s price plummeted recently after failing to maintain support at the $64K level. This critical juncture could potentially dictate the future of the cryptocurrency market. The daily chart reveals a downward trend after encountering resistance at $68K and breaching the $64K support level. The 200-day moving average is now being tested, and a failure to hold could lead to a further decline to $52K. Additionally, the Relative Strength Index (RSI) dipping below 50% indicates a continuation of the bearish momentum.
An Optimistic Outlook?
On the 4-hour chart, there seems to be a glimmer of hope for Bitcoin as it bounces back from the $60K support level with a long wick. The current trading range fluctuates between $64K and $60K. However, a retest of the $60K support zone is highly likely based on market structure and momentum. The outcome of whether the $60K level stands firm or crumbles will play a pivotal role in determining the price direction for the upcoming months.
Understanding Investor Behavior
Bitcoin’s failure to achieve a new all-time high prompts closer scrutiny of investor actions for insightful predictions. Short-term holder Spent Output Profit Ratio (SOPR) is a crucial on-chain metric that gauges the ratio of realized profits/losses by short-term Bitcoin holders. A SOPR above 1 signifies profit realization, while values below 1 denote loss realization. Recent data indicates a recovery in SOPR above 1 as the market rebounds from $55K. Nonetheless, the recent downturn is causing a decline in SOPR towards one, suggesting that short-term holders are merely scraping minimal profits. Should this trend persist, an excess supply surge may overwhelm the market as holders look to minimize their losses by offloading their coins.
