Bitcoin [BTC] surged past $100,000 a few days ago, but has since experienced several corrections, leading to a dip below $97,000.
Recent analysis indicates that there is a short-term support level around $96,000 for BTC. Is this a signal of further decline, or could a potential recovery push the price back up to $100,000?
Challenges Faced by Bitcoin
Over the last 24 hours, Bitcoin has seen a price drop of more than 2.5%, dropping below the $97,000 threshold. Currently, the leading cryptocurrency is trading at $96,970.58, with a market cap exceeding $1.91 trillion.
A notable finding highlighted by Glassnode, a data analytics firm, revealed a significant insight regarding BTC’s Cost Basis Distribution (CBD) metric, indicating where Bitcoin’s supply has gathered at different price levels.
Recent data suggests that the largest accumulation zone under $100,000 is at $99,559, with 125,000 BTC, while a range between $96,000 and $98,000, holding 120,000 BTC, is shaping up as a potential short-term support level.
Earlier reports from CryptoCrypto hinted at a potential drop for BTC towards the $96,000 support level. This prediction aligned with the historic levels of BTC’s MVRV ratio, which have previously preceded price corrections.
Potential for BTC Recovery
Further scrutiny of Bitcoin’s recent data by CryptoCrypto aimed to determine whether BTC is headed for more price declines or if there are indications of a resurgence towards $100,000.
CryptoQuant’s data revealed that BTC’s aSORP signal was in the red zone, indicating more investors selling at a profit, a potential sign of a market peak amid a bullish run.
Additionally, analysis of the king coin’s Binary CDD highlighted increased movement among long-term holders in the past week, raising concerns about potential negative impacts if these holdings are being liquidated.
Despite these factors, recent observations of Bitcoin’s exchange reserve suggest a rise in buying pressure over the last 24 hours as the metric continues to decline. Moreover, BTC’s accumulation trend score remains at a value of 1.
A score closer to 1 signals significant accumulation, indicating strong investor confidence in the cryptocurrency, potentially triggering a bullish trend reversal.
As of the latest update, BTC is currently testing its 20-day SMA support level. A successful test could set the stage for a move towards $100,000 once again.
The Chaikin Money Flow (CMF) shows a positive uptick, suggesting that BTC might have a chance to test the support level. However, if selling pressure intensifies in the short term, BTC could revisit the $96,000 mark.