Bitcoin has managed to stay above the psychological barrier of $100,000 for an extended period, despite broader market downturns following its peak of over $108,000.
In the last week, BTC has faced challenges in maintaining its monthly profits, showing a modest increase of 0.64%. Over the past 24 hours, it recorded a 2.05% rise.
According to analyses, these fluctuations could be part of a larger uptrend as BTC aims to set new all-time highs.
BTC Could Reach $220,000: An Uncertain Journey Lies Ahead
Bitcoin seems to be following the historical trends of its bullish cycles in 2017 and 2020, hinting at a potential peak of $220,000, as suggested by crypto analyst Ali Chart.
As BTC tracks this trajectory, it is anticipated to face three significant resistance levels, potentially sparking selling pressure before resuming its upward trajectory.
The current market decline seems to align with this overall framework, progressing towards these crucial zones.
Ali Chart outlined the possible price milestones as follows:
“Should Bitcoin (BTC) mirror the patterns of 2017 and 2020, we might see a minor correction after hitting $110,000, a sharp correction following $125,000, a major correction at $150,000, and the conclusion of the bull run at $220,000!”
Analyses suggest that these corrections could potentially be influenced by long-term investors, who are presently contributing to the downward movement of BTC.
Long-term Investors Impact Market Dynamics
Upon reaching a new high exceeding $90,000 in mid-November, Glassnode observed a notable shift in market distribution patterns.
During this period, long-term investors initiated substantial profit-taking activities, fueling market movements. This selling activity represented 54% to 70% of the trading volume, amounting to $73–$117 million per hour.
It’s worth noting that a specific group within the market has been leading this profit-taking trend.
Further examination reveals that this activity is primarily driven by BTC holders who have held their positions for 6 to 12 months. Many of these investors accumulated their holdings during the previous market cycle and have been major contributors to the recent profit-taking trend.
The Spent Output Profit Ratio (SOPR) for this 6–12 month category reflects patterns observed during the bull market of 2015–2018, with the SOPR staying below 2.5 for significant portions of the cycle.
If historical trends repeat, BTC could soon transition to an exhaustion phase where profit-taking slows down and buying interest picks up. This shift could potentially trigger a new rally in BTC prices, akin to previous cycles.
Analyses suggest that profit-taking and exhaustion phases might continue as BTC reaches new price milestones.
These stages are likely to prompt corrective movements before potential further rallies, with probable price adjustments anticipated at critical levels like $110,000, $125,000, and $150,000.