Bitcoin’s price has increased by 19% in the past few days, reaching $64,342. Despite this significant increase, the cryptocurrency faces resistance at $65,000.
A key group of investors known for taking profits at this point poses a threat to the continuation of the bullish momentum. Thus, Bitcoin’s valuation could reverse if selling pressure increases, leading to a decline.
Bitcoin Investors Can Take Profits
Bitcoin price is facing the threat of a correction, mainly due to the potential for selling. Signs of this can be seen in the ratio between the Market Value and Realized Value (MVRV).
A key indicator of profitability, this metric has re-entered the danger zone after nearly a month. Bitcoin’s 30-day MVRV currently stands at 6.3%, indicating that investors are in profit.
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Historically, when the MVRV ratio ranges between 2% and 12%, it often triggers selling pressure, leading to corrections. Thus, investors tend to lock in profits when this threshold is reached, which could lead to a drop in the price of Bitcoin.
Another critical indicator, the Short-Term Unrealized Profit/Loss (NUPL), suggests that short-term holders are experiencing massive unrealized profits. This group of investors, known for holding assets for less than a month, are usually quick to sell as soon as profits accumulate.
Bitcoin MVRV Ratio. Source: Santiment
The NUPL shows that bullish momentum has reached a level where short-term holders are likely to start selling, increasing the risk of a price decline.
Short-term holders (STH) are expected to start liquidating their positions as bullish sentiment fades above the current threshold. Historically, when STH are in profit and above the threshold, they sell their holdings, putting downward pressure on the price of Bitcoin. This makes a potential drop in price highly likely if this trend continues.
NUPL de STH do Bitcoin. Fonte: Glassnode
Price forecast
The recent 19% rally has brought Bitcoin’s price to $64,342, with $63,068 now acting as crucial support. This level has established itself as a key area where Bitcoin could find stability if selling pressure increases. However, despite the recent gains, a breakout of the $65,000 resistance level seems unlikely in the near term.
If profit-taking intensifies, Bitcoin could fall below the $63,068 support, potentially falling to $59,666, the next critical support level. This price floor could serve as a point for Bitcoin to recover if selling pressure weakens. However, failure to hold this support could lead to further declines.
Read more: Bitcoin Price Prediction 2024/2025/2030
On the other hand, if the market’s optimism heading into October continues, Bitcoin could have a chance to break above the $65,000 resistance. A sustained rally above this level would invalidate the current bearish outlook, potentially leading to further price increases and a continuation of the uptrend.
Bitcoin Price Analysis. Source: TradingView
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