Bitcoin traders are optimistic that the price will shake off recent weakness and surge all the way to the local resistance level of $73,800. Even so, buyers must have full confidence before Bitcoin can successfully break through these areas that could trigger a large number of liquidations.
In addition, this upward momentum must be maintained by new capital inflows, and the inflow of funds brought by investors who are afraid of missing out on the market is undoubtedly the most ideal.
Currently, Bitcoin is moving relatively steadily within the bearish price range of last week. Meanwhile, the coin is moving within the range of the bearish candlestick that was significantly volatile on September 1. Although the spot price has moved higher and found support points at the $56,500 and $57,000 support areas, some traders are still skeptical.
Bitcoin needs to break through $70,000 to continue its rally
There are several reasons to be cautious. According to IntoTheBlock, bulls will have to gain strong support if they want to continue the upward trend in the first quarter of 2024. According to their data, about 7 million addresses bought BTC between $61,700 and $70,500.
The analysis platform noted that these addresses are currently losing money based on spot prices, so they are more likely to choose to sell as long as the price approaches the break-even point.
Data analysts at IntoTheBlock said their continued selling pressure and motivation for safety concerns prevented BTC from rising sharply and setting new all-time highs. Given this, for Bitcoin to soar, bulls need to maintain the rally above $60,000.
Furthermore, they need to decisively break above $70,000, preferably on expanding volume. Regardless, the market participation should exceed the volume posted on August 5, which is when prices fell to a low of $49,000 in early August.
Over 30% of BTC supply is in the hands of long-term holders, and “paper” BTC is decreasing
While these nearly 7 million addresses may be selling BTC, a large portion of the BTC supply is in the hands of long-term holders (LTH). LTH refers to addresses that have held BTC for at least 155 days. According to data from IntoTheBlock, more than 30% of the total supply has not been moved in more than five years.
Meanwhile, another bullish factor that could support prices in the coming days is the market’s absorption of supplies from German authorities, the U.S. Department of Justice (DoJ), and Mt. Gox.
One on-chain analyst noted that this absorption is significant. This development, coupled with the reduction of “paper” BTC on derivatives platforms such as Binance, may support prices.
