Bitcoin Cooling Off – Prices Might Correct, But Not to $70,000: Here’s Why
Bitcoin price spiked to record highs this week, smashing $90K, but as BTC cools off in a consolidation, it may not post sharp losses to $70,000.
Bitcoin
Price
Trading volume in 24h
Last 7d price movement
might drop nearly 5% in the past 24 hours, dragging the total crypto market cap by 5% to $3 trillion.
There are concerns that after the over $20,000 gain from March 2024 high to all-time highs, a correction might be in the offing.
Bitcoin May Correct: But Not To $69,000
While the community braces for this cool-off, one analyst is defiant. Citing market data, he observes that Bitcoin trades above the short-term holder (STH) basis of $69,000.
STH are individuals who bought the coin less than six months ago and are often considered speculators.
It changes when a holder has diamond hands and chooses not to sell for at least six months. The entity becomes a long-term holder (LTH).
(Source)
Now that the STH basis is at $69,000, most of these traders are in the money and may cash out at spot rates, heaping more pressure on the coin.
Since prices are consolidating, clear in lower time frames, it may spark a sell-off as buyers are fragile.
While this is possible, the on-chain analyst said waiting is the best approach. Dumping now could be exiting just when the rally is starting.
The only time Bitcoin will be considered “stretched” is when the market value to realized value (MVRV) ratio breaks above the critical threshold of 1.35.
According to CryptoQuant, and as shared by the analyst, the MVRV ratio for Bitcoin is now at around 1.3.
Even if prices end up falling and speculators begin to fall as they cash out, there is hope.
DON’T MISS: The 16 Best Altcoins to Buy in 2024
Donald Trump Wave: Institutional and Retail Demand Soaking Up Miner Liquidation
Most of these coins from “weak hands” could end up in the mouths of whales and aggressive spot Bitcoin ETF issuers, who have been rapidly loading up over the last few months.
For this reason, it is doubtful whether prices will break lower, dropping below $74,000 or March highs to as low as $69,000, which is the STH cost basis.
(BTCUSDT)
Donald Trump’s victory has prompted optimism and strong enthusiasm among retailers and institutions. They are highly confident that key pro-crypto policy changes will occur.
These include creating a favorable environment for miners, using Bitcoin to address the growing debt problem, and establishing a reserve.
And there is evidence all over.
The analyst recommends monitoring spot trading activity on exchanges like Coinbase and Binance to gauge the strength of bulls.
As Bitcoin soared to record highs, centralized crypto exchanges posted over $7.5 billion in monthly trading volume in the spot market. This spike points to strong demand for the coin as well as altcoins.
(Source)
While everyone is watching price, miners have taken advantage of the spike to cash in on the rally. When prices soared above $90,000, on-chain data showed miners sold 25,000 BTC.
(Source)
Looking at historical trends, especially in June, miner liquidation tends to introduce temporary headwinds for bulls. However, by selling, they will be replenishing supply for insatiable spot Bitcoin ETF issuers.
EXPLORE: Miami’s Odell Beckham Jr Trolls No-Coiners as Stupid
Join The 99Bitcoins News Discord Here For The Latest Market Updates
99Bitcoins may receive advertising commissions for visits to a suggested operator through our affiliate links, at no added cost to you. All our recommendations follow a thorough review process.
Free Bitcoin Crash Course
Learn everything you need to know about Bitcoin in just 7 days. Daily videos sent straight to your inbox.
