Bitcoin [BTC] has once again showcased its cyclical behavior, as the Bitcoin Trend Strength Prediction has come to fruition.
In September 2016, Bitcoin experienced a decline that led it into the support zone, and a similar trend has emerged in September 2024.
Throughout these recurring cycles, the market dynamics have remained steady. The pattern of three descents into the support zone within the same cycle has historically indicated an upward price movement.
Similar to previous instances, the ongoing cycle hints that Bitcoin’s price might be gearing up for another surge in the market.
Currently, the price of Bitcoin is hovering around the $56k range, being supported at a critical level, while facing resistance near $65k. This newly established support level could potentially initiate a rebound or lead to further declines.
If Bitcoin fails to maintain levels above $56k, a continuation of the downtrend could see it revisiting $49k before any significant recovery. Conversely, holding this level may indicate a potential upward movement for BTC in the upcoming weeks.
Analysis of Liquidity Levels
Regarding liquidity, the presence of sell orders has exerted downward pressure on Bitcoin’s price, facilitating the fulfillment of buy orders. There are several purchase bids situated below the $59k mark, a trend that has persisted for the past half-year.
Notably, despite substantial whale activity, the price has remained relatively stable, with large holders driving prices down to accumulate more BTC.
It is noteworthy to mention that Binance’s order books illustrate a strategy of bid fulfillment at these levels before a potential price upsurge.
Declining Bitcoin Volatility
Bitcoin’s volatility also plays a role in shaping its trajectory. With BTC now trading at approximately $56k, its volatility has significantly decreased compared to 2021, currently standing at around 4 to 6 times lower.
The $60,000 threshold, previously viewed as a speculative peak, has transformed into a consolidation zone where long-term holders amass Bitcoin assets.
Consequently, $60,000 has become the new support level, a critical price point that Bitcoin may not revisit in the near term as new support thresholds are established.
Sentiment Analysis: Fear and Greed Index
At the present moment, market sentiment appears to reflect the fear prevalent during the 2022 market bottom. The prevailing apprehension has resulted in many investors staying on the sidelines, although this sentiment could signal a turnaround opportunity.
With a rise in institutional adoption and increased development on Bitcoin’s network, the ongoing market downturn could potentially present a significant buying opportunity.
Historically, such fear often precedes substantial price upswings, indicating a possible impending uptrend.
Percentage of Bitcoin Supply in Profit
Despite uncertainties, the percentage of profitable Bitcoin supply has decreased by 25%, implying a reduction in the number of investors realizing gains. Presently, approximately 4,938,183 BTC are held at a profit, valued at around $280 billion.
This decline in profitable positions suggests that now might be an opportune moment for long-term holders to retain their positions, especially considering the likelihood of a market recovery and higher BTC valuations in the foreseeable future.