A swift descent to a $23K valuation could potentially knock Bitcoin (BTC) off its recent gains, condensing months of perceived stability in the cryptomarket. The lingering uncertainty traces back to a rout in August, where BTC sustained an unexpected 11% decline, pushing its value below $26,000 at the onset of September.
With a seemingly bearish market sentiment, various stakeholders have voiced concerns over the stability of BTC’s lower level supports. Renowned trader Ali notably flagged BTC’s lack of robust backing below the $25,400 marker. Ali warned of a swift downward adjustment to $23,340 in the event of a breach beneath that threshold. The UTXO Realized Price Distribution (URPD) metric, from on-chain analytics firm Glassnode, which gauges the price at which the current batch of transaction outputs materialized, reinforced this prediction.
On a broader canvas, on-chain monitoring resource Material Indicators joined the chorus of concern about BTC’s immediate future. Based on signals from its proprietary trading tool, Trend Precognition, Material Indicators pinpointed $24,750 as the level that must hold for any hope of a rebound. Falling below $25,350, it explained, would invalidate the weekly signals. Yet, this grim picture was offset by the possibility of a solid rally, if prices manage to stay above $24,750.
However, the large-scale liquation of BTC longs on August 31, the highest since Bitcoin’s 10% dip earlier in the month, portrayed a more explicit state of market affairs. The figure from CoinGlass demonstrated the magnitude of these liquidations, standing at $41 million with the cross-crypto total amounting to a significant $108 million.
This overall state of affairs paints a suspenseful picture, leaving observers on their toes. There are signals of tremors suggesting the possibility of a downward trend where potentially BTC could plunge to $23K, yet there are also faint hopes of prices holding onto existing levels and navigating successfully through turbulent waves. While this duality prepares the market for downside risks, it also keeps a window open for upside surprises. Undoubtedly, in the fast-paced world of cryptocurrencies, anything can happen, but these anticipations and readings ground us and aid in forming an informed view of the likely market scenarios in the short to medium term.
Source: Cointelegraph
