Bitcoin price stuck in extended consolidation phase due to drop in capital inflows Report
Bitcoins significant drop in capital inflows over the last six months is contributing to the current price consolidation.
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Bitcoins significant drop in capital inflows over the last six months is contributing to the current price consolidation.
Digital asset investment products posted a second consecutive week of inflows last week, totaling $321 million, CoinShares reported.
An analyst has explained how losing this on-chain demand zone could cause Ethereum to witness a crash to as low as $1,800. Ethereum Is Currently Retesting A Major On-Chain Support Zone In a new post on X, analyst Ali Martinez has discussed about how Ethereum is looking like in terms of investor cost basis distribution right now, citing data from the market intelligence platform IntoTheBlock. In the above chart, the dots represent the amount of ETH that was last purchased by investors or addresses inside the corresponding price range. As is visible, the $2,292 to $2,359 range stands out in terms of the size of its dot, suggesting that some heavy buying had occurred between these levels. Related Reading: Bitcoin Sentiment Spikes After Mild Price Jump: Crowd Too Excited Too Quickly? More specifically, almost 52.3 million ETH was acquired by 1.9 million addresses inside this range. Since Ethereum is currently retesting the range, all these investors would be just breaking-even on their investment. To any investor, their cost basis is naturally an important level and thus, they may be more prone to making some kind of move when a retest of it happens. For ranges that host the acquisition level of only a small amount of holders, though, any reaction resulting from a retest isn’t anything too relevant for the wider market. In the case of price ranges that are huge demand zones, however, a retest can cause visible fluctuations in the asset’s price. The aforementioned Ethereum range naturally belongs to this category. As for how exactly a retest of a large demand zone would affect the cryptocurrency, the answer lies in investor psychology. Retests that take place from above, that is, of investors who were in profit just before the retest, generally produce a buying reaction in the market. This is because these holders may believe the asset will go up again in the future, so getting to buy more at their cost basis can appear like a profitable opportunity. As Ethereum is currently retesting the $2,292 to $2,359 range, it’s possible it may feel support and find a rebound. In the scenario that a break under it takes place, however, the cryptocurrency’s price may be in danger. From the chart, it’s apparent that the ranges below this demand zone only carry the cost basis of a small amount of investors, so they may not be able to prevent a further decline in the asset. Related Reading: Legendary Bitcoin Puell Multiple Finally Enters Buy Territory “If this demand zone breaks, we could see a sell-off driving ETH toward $1,800,” notes the analyst. A drawdown to this level from the current price would mean a crash of more than 21% for the coin. It now remains to be seen how the Ethereum price will develop in the coming days and if the on-chain support zone will hold. ETH Price After retracing its recovery from the last few days, Ethereum is back at $2,300, which is inside the aforementioned price range. Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com
Investors balance risk as Bitcoin futures dip, reflecting uncertainty before the Federal Reserve's September meeting.
Ethereum derivatives metrics show increased activity, indicating higher interest but not necessarily a bullish trend.
An analyst has warned that support levels weaken the more they are retested and Bitcoin is now doing a third consecutive retest of a major such level. Bitcoin Is Again Retesting The Short-Term Holder Realized Price As explained by CryptoQuant community manager Maartunn in a new post on X, BTC’s latest drawdown has led to it doing another retest of the short-term holder Realized Price. The “Realized Price” here refers to an indicator that, in short, keeps track of the average cost basis of the investors or addresses on the Bitcoin network. When the value of this metric is greater than the spot price of the cryptocurrency, it means the average investor in the market could be assumed to be holding a net unrealized profit. On the other hand, the indicator being below the asset’s value suggests the dominance of losses on the blockchain. Related Reading: Ethereum Seeing High Exchange Outflows, But Watch Out For This Bearish Signal In the context of the current topic, the Realized Price of the entire userbase isn’t of interest, but that of a specific segment of it: the short-term holders (STHs). The STHs include all the investors who bought their coins within the past 155 days. Now, here is a chart that shows the trend in the Bitcoin Realized Price for the STHs over the last few months: As displayed in the above graph, the Bitcoin spot price had slipped under the STH Realized Price in June, but it finally managed to break above the line halfway through last month. In the weeks since the asset has seen a couple of pullbacks back to the line, but it has managed to find rebounds each time. Now, after the latest decline, the coin’s price is once again retesting the level. Historically, the STH Realized Price has been a reliable point of support for the cryptocurrency during bullish periods. The explanation behind this pattern may lie in how investor psychology works. The STHs represent the fickle-minded side of the sector, who are sensitive to change. As such, whenever the price retests their cost basis, they may be prone to making panic moves. In times when the atmosphere in the market is bullish, the STHs may believe such a retest to merely be a dip opportunity, so they could decide to accumulate more. This could be why Bitcoin has found rebounds at the level in the past. While the level has generally been reliable indeed, this latest retest that BTC is facing is already the third within a narrow period. “Each time a level is tested, it becomes weaker,” notes Maartunn. Related Reading: XRP Bullish Signal: Shark & Whale Population Sharply Growing It now remains to be seen if the Bitcoin STHs still carry a bullish outlook on the cryptocurrency or if the constant pullbacks have put fear on their minds. BTC Price Bitcoin has continued its recent bearish momentum in the past 24 hours as its price has slid another 2% to reach the $64,700 level. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
Bitcoin price is pinned below $60,000, but derivatives and stablecoin data show traders remain optimistic.
The Bitcoin bull market is in full swing, as proved by the BTC futures premium reaching a five-week high.
An analyst has pointed out how Bitcoin is back above the cost basis of the short-term holders, a sign that can be bullish for the asset. Bitcoin Is Back Above The Realized Price Of Short-Term Holders As explained by CryptoQuant community manager Maartunn in a new post on X, BTC has reclaimed the Realized Price [...]
The post Bitcoin Forming A Signal Thats Usually Very Bullish, Analyst Says appeared first on Crypto Breaking News.
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Bitcoin has observed a plunge during the past day, taking the asset’s price under $67,000. Here’s the historical support level that the asset could visit next. Bitcoin Is Now Not Far From The Short-Term Holder Realized Price As analyst James Van Straten pointed out in a post on X, the Realized Price of the Bitcoin Short-Term Holders has been going up recently and currently sits around the $64,000 level. The “Realized Price” here refers to an on-chain metric that keeps track of the cost basis of the average investor in the BTC market. This indicator is based on the “Realized Cap” model for the cryptocurrency. Related Reading: Litecoin In Uphill Battle: Strong Resistance Might Block Recovery When the asset’s spot price is greater than the Realized Price, it means the investors are carrying some net unrealized profits right now. On the other hand, the coin’s value under the metric suggests the dominance of losses in the market. In the context of the current topic, the Realized Price of a specific sector segment is of interest: the Short-Term Holders (STHs). The STHs include all the investors who bought their coins within the past 155 days. Here is a chart that shows the trend in the Realized Price of the Bitcoin STHs over the last few years: As displayed in the above graph, the Bitcoin STH Realized Price rapidly climbed during the rally towards the all-time high price (ATH) earlier in the year. This trend naturally makes sense, as the STHs represent the new investors in the market, who would have had to buy at higher prices as the asset climbed up, thus pushing the cohort’s average up. Since BTC’s consolidation phase following the March ATH, the indicator’s uptrend has slowed, but its value is increasing nonetheless. After the latest increase, the metric has approached $64,000. Now, what significance does the Realized Price of the STHs have? Historically, this indicator has taken turns acting as a major support and resistance line for the cryptocurrency. During bullish periods, this metric can facilitate bottom formations for the cryptocurrency, thus keeping it above itself, while bearish trends generally witness the line acting as a barrier preventing the coin from escaping above it. Transitions beyond this level have generally reflected a flip trend for the coin. This apparent pattern has held up likely because the STHs, being the relatively inexperienced hands, can be quite reactive. The cost basis is an important level for any investor, but this cohort, in particular, can be more likely to panic when a retest of their cost basis takes place. When the sentiment in the market is bullish, the STHs could decide to buy more when the price drops to their average cost basis, believing the drawdown to be merely a “dip” opportunity. In bearish phases, though, they may react to such a retest by panic selling instead. Related Reading: Bitcoin Could See Next Top At $89,200, Crypto Analyst Suggests The chart shows that Bitcoin found support around this line during the crash at the end of April/start of May, potentially implying a bullish sentiment has continued to be dominant. With BTC seeing a drop below $67,000 in the past day and the STH Realized Price closing in at $64,000, it will be interesting to see how a potential retest would play out this time. BTC Price At the time of writing, Bitcoin is trading at around $66,800, down over 3% in the past week. Featured image from Dall-E, Glassnode.com, chart from TradingView.com
After two weeks of strong action, the Bitcoin price seems to be back on the right track, and the bull run which once looked done and dusted appears to be roaring back to life. This previously improbable recovery is now accentuated by the premier cryptocurrencys likely return to above the important $100,000 level. However, the Bitcoin price appears to have its hands full in its quest for a six-figure valuation in the near future. The latest on-chain data suggests that the market leaders price is currently wedged within a significant range, which could determine its movement over the next few weeks. ‘Pretty Much Blue Skies Above $100’ For BTC – Analyst In his recent post on the X platform, prominent crypto analyst Checkmate shared an interesting on-chain insight, saying that the Bitcoin price is working its way through the $93,000 and $100,000. This on-chain observation is based on the supply distribution heatmap, which shows the concentration of coins acquired at different price ranges. Related Reading: Bitcoin Is Warming Up: Analyst Maps 3 Scenarios That Could Trigger the Next Big Rally The deep red shades on the distribution heatmap represent high volumes of coin activity, indicating that large clusters of investors have their cost bases in this price range. These cost bases clusters act as psychological and technical resistance zones, as investors are likely to sell when prices return to their purchase prices. As shown in the chart above, there is a significant supply barrier for the Bitcoin price in the $93,000 – $100,000 region. This suggests that the premier cryptocurrency faces significant potential selling pressure due to investors looking to break even after being in the red for so long. Interestingly, the distribution heatmap shared by Checkmate shows that beyond the $100,000 threshold, the Bitcoin supply significantly declines. This suggests low historical buying activity (lower coin amounts being held) above this price level, meaning relatively less significant resistance. Ultimately, a breach above the $100,000 mark could be the beginning of a strong upward rally for Bitcoin price, as Checkmate noted that blue skies is what lies beyond the psychological price level. However, failure to break out of the $93,000 $100,000 region could result in another extended consolidation period. Bitcoin Price At A Glance As of this writing, the price of BTC stands at around $96,680, reflecting no significant movement in the past 24 hours. According to CoinGecko data, the flagship cryptocurrency is up by more than 2% on the weekly timeframe. Related Reading: Ethereum Running Out Of Time? Analyst Says New ATH May Not Come This Cycle Featured image from iStock, chart from TradingView
Calculating the cost basis of cryptocurrency for tax purposes involves considering purchase prices, transaction fees and events such as hard forks or staking rewards.
An analyst has pointed out how Bitcoin recently closed below a historically important on-chain level, a failure to reclaim which could spell trouble for BTC. Bitcoin Fell Below Short-Term Holder Cost Basis In Latest Crash In a new post on X, Maartunn discussed BTCs recent close below the realized price of the short-term holders and [...]
The post Bitcoin Loses Historical Level, Analyst Says Reclaim And Bounce, Or Die appeared first on Crypto Breaking News.
BTC derivatives show moderate bullishness, paving the way for further gains above $70,000.
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