Bitcoin sheds 3% as near-term price surge looks imminent
Long-term holders (LTHs) have continued to reduce their BTC offloading efforts over the past week, suggesting a price spike soon.
- Bitcoin could rise to anywhere between AUD$46k and $49k shortly, experts believe.
- The total market capitalisation of the digital asset sector stands at AUD$1.8 trillion, down 5% since yesterday.
- Bitcoin's total valuation is at AUD$775.6 billion, with its market share at a little north of 44%.
After having found solid support around AUD$42k for a week, Bitcoin proceeded to plunge to AUD$39,200 before forging a recovery of sorts and regaining its AUD$41,500 resistance. BTC is currently down 4% over the past week while trading at AUD$40,673.
Bitcoin's dip to AUD$39k has been its lowest since the recent Terra Luna debacle, with BTC liquidations rising to AUD$164 million (US$117 million) over the last 24 hours. Experts believe that Bitcoin may be looking at a near-term upside of AUD$46k–$49k (US$32.8k–$35k). On-chain data suggests that thinning liquidity levels could see BTC dipping to AUD$35k–$39k (US$25k–$28k) before rising again.
A trend reversal may also be on the cards. Pundits point to the behavior of LTHs for evidence of the same. Data suggests that HODLers have slowed down their BTC sales, as exhibited by their cost basis numbers leveling out. Cost basis alludes to the value at which LTH accounts accrue BTC on aggregate. When the price of the asset falls, it reflects their resolve to hold on to their coins. On the subject, an expert noted:
"For the past few months, we've had LTH capitulation — shown by the rapidly falling LTH cost basis. An uptick is a first sign that LTH might have stopped capitulating. Early signal, but finally a change in trend."
Price rise incoming?
Bitcoin's 3% drop over the past day comes amidst the release of the US Federal Reserve's Federal Open Market Committee's (FOMC) latest agenda. Many had expected the market to be hit with a lot of volatility following this. However, the crypto market has avoided any serious turbulence.
The report did not include any new developments other than what were already known about the Fed's decision to combat globally rising inflation levels, such as interest rate hikes. Even the traditional finance sector has remained quite stable over the last 48 hours. Popular analyst Michaël van de Poppe believes this stability could see BTC/USD climbing to AUD$46k (US$32.8k) relatively soon.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.