Bitcoin’s price is positioned between a critical psychological turning point and the optimism zone. Historically, this zone represents a key moment when investors develop optimistic or pessimistic views depending on whether they are in the money or not. As long as Bitcoin remains in this range, the probability of a significant decline appears low.

The Importance of Staying in the Optimism Zone

Historical data shows that maintaining stability in these critical zones is vital to the continuation of bull markets. In particular, the “Supply in Profit” metric, which reflects the period when investors are in the money, indicates that optimism increases when a significant portion of the supply is in the money. Bitcoin’s current price levels are currently testing this optimism zone.

Review of Previous Cycles

In past market cycles, such as the 2016 and 2020 bull markets, Bitcoin continued to rise when it remained between the psychological turning point and the optimism zone. When these lines held, the market entered a strong uptrend. If optimism is maintained under current conditions, a similar move is likely to occur.

Expectations of a Major Drop Are Easing

Given the current price action and supply metrics, the probability of a significant price drop is low as long as Bitcoin remains within this range. A drop below this range could shift market sentiment to pessimism, leading to lower prices. However, until such a breakout occurs, the market is likely to remain optimistic.

Conclusion

Bitcoin is at a psychologically important level. Historically, when prices remain within this range, the market has continued its upward trend. Staying within this zone of optimism is critical for the continuation of the bull run. If this zone is maintained, investors will have increased confidence in future price increases.