In light of an impressive $8 billion trading volume influx, the future valuation of Bitcoin has become a hot topic among traders and investors. This surge has sparked a flurry of speculation – could we be witnessing the end of the cryptocurrency’s recent downturn? To explore potential Bitcoin price trajectories, one must consider several factors, including unprecedented dormancy in its supply and key technical indicators.
Recent data from on-chain analytics firm Glassnode reveals a record-breaking level of inactivity in Bitcoin’s supply. According to the firm, about 40.083% of the total Bitcoin supply has been dormant for over three years, marking an unprecedented event in the cryptocurrency’s history. This suggests that many Bitcoin owners have held onto their assets, unfazed by the drastic price swings that are a hallmark of the Bitcoin market. Supply dormancy, often used to understand investor behavior and market sentiment, is a term denoting the length of time Bitcoin remains untouched or untraded in a wallet.
Elevated levels of dormancy usually signify a ‘hodling’ behavior, in which Bitcoin owners or ‘hodlers’ retain their assets through market ups and downs, foreseeing a long-term increase in value. Currently, Bitcoin holds a price tag of $26,800, and it seems to have found a buffer at the $26,300 level, successfully halting its downward trajectory. The previous support level, once breached, now poses a potential hurdle for Bitcoin, serving as a resistance level.
The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), key technical indicators, presently indicate an oversold market. This implies that if Bitcoin sustains above the $26,000 mark, there is a significant likelihood of a bullish rebound aiming for $27,800 or $27,500. However, it’s important to acknowledge that the 50-day Exponential Moving Average (EMA) establishes a significant resistance point near $27,500, indicating that a bearish sentiment continues to dominate the market.
Keeping a close eye on the $26,000 mark is crucial; it serves as a key turning point for Bitcoin. Should Bitcoin manage to hold above this point, it might aim to challenge subsequent resistance levels at $27,500 or $28,400. Conversely, if the bearish trend persists, the next support could emerge around the 50% Fibonacci retracement level, which stands at $25,300.
In addition to Bitcoin, the Cryptonews Industry Talk team has curated a list of 15 promising cryptocurrencies for 2023 that show strong prospects. These cryptocurrencies exhibit substantial potential for growth in the near and distant future, indicating that understanding the broader crypto landscape is essential for investors and traders alike.
Source: Cryptonews
