Bitcoin Could Drop Below: Following its historic high on Friday, Bitcoin (BTC) has yet to experience its anticipated next rally. The leading cryptocurrency approached, but did not break, the psychological $100,000 threshold. Over the past few days, BTC’s price has dropped to $92,000.
November 2024 is The Best Time To Buy Cryptocurrency According to analysis from Glassnode, further market correction is possible, with BTC potentially falling to $88,000 before attempting to breach the $100,000 level again. Such a healthy correction could also create opportunities for newcomers to establish positions.
Further Market Correction Expected
Glassnode reports that Bitcoin’s price might dip below the $88,000 mark before making another push toward the $100,000 resistance. The rapid rise in BTC’s value left a significant gap between $76,000 and $88,000, a range where no substantial support has formed, suggesting room for correction.
At the time of writing, Bitcoin’s price is hovering above $93,000, indicating the potential for a 5-15% correction, a common occurrence in cryptocurrency markets.
This phase of exploration and correction is natural in market cycles, typically followed by consolidations that establish stable ranges. A well-distributed supply is critical for uncovering long-term demand zones that influence Bitcoin’s price trajectory.
Long-Term Holders Poised to Re-enter
Glassnode also highlights that long-term holders (LTHs), who primarily accumulate rather than sell, may re-enter active trading during these corrections.
Parallels to Early 2024
The recent surge mirrors patterns observed in Q1 2024. Following the approval of spot ETFs, institutional capital rapidly boosted Bitcoin’s price, leading to new highs since November 2021.
The primary drivers of Bitcoin’s price movements remain institutional investors and long-term holders. Glassnode reports that LTH wallets currently realize daily profits of $2.02 billion—significantly higher than levels seen in March. However, sustained demand is necessary, and recent days have seen a decline in buying momentum.
Risk of Overheating Market
The rapid price increase and stretched market conditions pose risks. Bitcoin’s Relative Strength Index (RSI) is above 70, suggesting the potential for a trend reversal. Meanwhile, the Coin MarketCap Fear & Greed Index stands at 82/100, indicating excessive greed and overconfidence.
This dynamic creates opportunities for sellers to trigger a wave of profit-taking. While the realized profit-to-loss ratio remains low compared to previous bull market peaks, the selling side is currently dominated by holders who acquired BTC 6-12 months ago, accounting for 35% of realized profits.
ETF Traders and Profit-Taking
The emergence of exchange-traded funds (ETFs) has attracted “swing traders” to the cryptocurrency market. These traders buy at lower prices and sell as prices rise, with realized profits currently ranging from $7.2 billion to $13.1 billion.
Conclusion
Bitcoin’s recent pullback highlights the natural ebb and flow of market cycles, where corrections and consolidations play a crucial role in building sustainable upward momentum. While the psychological $100,000 mark remains a key resistance, further dips to levels around $88,000 could set the stage for a healthier long-term rally.
FAQs
Could Bitcoin fall below $88,000 before rebounding?
Yes, according to Glassnode, Bitcoin might dip as low as $88,000 before attempting to break the $100,000 resistance. This is due to a gap in price support between $76,000 and $88,000 created during its recent rapid ascent.
What role do long-term holders play in Bitcoin’s price movements?
Long-term holders (LTHs) primarily accumulate Bitcoin during corrections and are less likely to sell. Their behavior contributes to price stability and often sets the stage for future rallies.
How do institutional investors impact Bitcoin’s price?
Institutional investors significantly influence Bitcoin’s price by injecting large amounts of capital into the market, especially following events like ETF approvals. Their participation often drives bullish trends and market confidence.
