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Bitcoin experienced a very volatile trading session yesterday, with prices fluctuating between $92,300 and $96,420 throughout the day. The cryptocurrency is now hovering around the $93,000 mark and is struggling to establish a clear direction in the near term. As market participants await decisive action, uncertainty looms over whether Bitcoin will maintain its bullish structure or undergo a deeper correction.
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CryptoQuant analyst Axel Adler recently shared valuable insights, highlighting an important trend among short-term (STH) holders. According to Adler, these investors continue to sell their coins at high profit margins, taking advantage of Bitcoin’s recent upward momentum. While profit-taking is a natural part of market cycles, the lack of consistent demand to offset this selling pressure could jeopardize Bitcoin’s price stability.
If demand cannot match the pace of active profit taking, a local correction could occur, potentially leading to a decline in Bitcoin’s price. This delicate balance between profit-taking and market demand makes the coming days crucial in determining Bitcoin’s next move. Will buyers step in to support the price, or will selling pressure lead to a deeper pullback? Investors and analysts are closely watching how Bitcoin fares at this crucial juncture.
Bitcoin demand levels are responding
Bitcoin has seen days of intense volatility as it struggles to break above the psychological barrier at $100,000, while remaining firmly above the $92,000 support. The market continues to move, with investors and analysts keeping a close eye on Bitcoin’s next move. Despite the uncertainty, Bitcoin’s resilience at these key levels highlights the ongoing tug-of-war between bullish and bearish forces.
Top analyst Axel Adler recently shared an insightful analysis about Xwhich sheds light on the behavior of short-term holders (STHs). According to Adler, STHs are actively selling their coins at high profit margins, taking advantage of recent price increases. While profit taking is a normal part of market cycles, a lack of consistent demand to counteract this selling pressure could lead to a local correction and a potential price decline.
However, in the event of a price decline, STHs are unlikely to continue selling their holdings, as selling at a loss in a bull market is often considered an unwise move. This dynamic could give Bitcoin the breathing room it needs to stabilize at its key support levels, currently around $90,000.
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If Bitcoin successfully holds above $90,000, a period of consolidation around this level could lay the foundation for the next rally, potentially pushing BTC to new all-time highs. The coming days will be crucial in determining whether Bitcoin continues its rise or faces a temporary setback.
BTC holds over $90K
Bitcoin is trading at $93,800 after days of selling pressure and market uncertainty. Despite remaining above the key support at $92,000, the loss of both the 4-hour 200 moving average (MA) and the exponential moving average (EMA) is a bearish signal for the short term. These indicators, often seen as gauges of market momentum, suggest that Bitcoin may need additional demand to regain upside.
If the bulls want to regain control and ignite a new rally, Bitcoin must recover these critical levels. The 4-hour 200 MA at $96,500 and the 4-hour 200 EMA at $98,500 are essential hurdles. Successfully crossing these thresholds and securing a decisive close beyond them would confirm renewed bullish momentum.
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If Bitcoin pulls off this feat, it could pave the way for a massive rally in price discovery, breaking psychological barriers like $100,000 and paving the way for new all-time highs. On the other hand, failure to regain these indicators could signal further consolidation or a possible retest of lower support levels.
Featured image of Dall-E, chart from TradingView
Credit : www.newsbtc.com
