Bitcoin has faced a period of low volatility, but it has maintained a secure price range recently. However, shifts in investor behavior and historical patterns suggest that a more negative outlook could be on the horizon.
While Bitcoin has remained relatively stable, it may soon face challenges that could lead to a significant price adjustment.
Bitcoin Faces Selling
Currently, Bitcoin’s market sentiment appears to be fueled by investor optimism. The unrealized profits have surpassed the +2 standard deviation (SD) threshold, signaling that Bitcoin is entering a euphoric phase. Historically, whenever unrealized profits cross this threshold, Bitcoin experiences a short-term surge in price, often followed by sharp corrections.
The surge in unrealized profits above +2 SD is a common sign of market exuberance. Investors who bought at lower prices might start selling their positions to lock in gains, which often triggers a decline in price.
Bitcoin Relative Unrealized Profit. Source: Glassnode
The macro momentum for Bitcoin is showing signs of profit-taking. Realized profits have spiked over $500 million per hour three times in the last 48 hours. This uptick indicates that holders are cashing out as Bitcoin’s growth slows. With Bitcoin not showing any significant upward movement, these key holders are securing their gains.
This could lead to increased selling pressure, which could weigh on Bitcoin’s price. As realized profits continue to rise, Bitcoin’s price may face further downside risk if this trend persists.
Bitcoin Entity Adjusted Realized Profits. Source: Glassnode BTC Price Needs To Breach Barriers
Bitcoin’s price is currently at $105,435, holding above the support of $105,000. However, the crypto king is facing a resistance level of $106,265. Despite this, the Relative Strength Index (RSI) remains above the neutral mark of 50.0, indicating that the bullish momentum is still intact.
This gives Bitcoin a chance to push past the $106,265 resistance and potentially reach $108,000, depending on the broader market conditions.
A successful breach of $106,265 would open the door for Bitcoin to challenge higher levels. If the market conditions remain favorable, this could lead Bitcoin towards $108,000. This is crucial for sustaining upward momentum and enabling Bitcoin to reach new highs.
Bitcoin Price Analysis. Source: TradingView
However, if market sentiment turns negative and profit-taking accelerates, Bitcoin could face a correction. If the price falls below the $105,000 support level, it could quickly decline towards $102,734 or lower. This scenario would invalidate the bullish outlook and lead to further selling, causing Bitcoin’s price to drop.
