Bitcoin's Dip Below $64K Raises Concern Among Traders - Potential Rally on the Horizon?
Summary:
Bitcoin's value recently fell below the critical $64,000 level, causing concerns about a further drop to rates not seen in over 51 days, according to cryptocurrency analysis firm CryptoQuant. The decrease under the short-term holder realized price (STH-RP) indicates a potential further decline, further adding to the unease amongst traders. However, despite the current dip, analysts suggest that Bitcoin's prolonged stability around the $65,000 mark could be setting it up for a significant rally in the future, potentially allowing the market cap to reach three times its current size.
Bitcoin's value recently plunged below $64,000, surpassing its short-term holder realised price and indicating a potential further drop to rates not seen in over seven weeks, as per analytics firm CryptoQuant's assessment. "Bitcoin is no longer trading above the crucial $65.8K support level - it's now sub-$64K", CryptoQuant reported in a post dated June 21. The firm suggested this dip could set the stage for an 8%-12% regression towards $60,000– a price point left untouched since May 3, when Bitcoin was valued at $59,122, in line with CoinMarketCap statistics.
As of June 22, Bitcoin experienced a further 2% drop to $63,442, breaching the short-term holder realised price of $64,230, the data sourced from LookIntoBitcoin conveys. The short-term holder realised price (STH-RP) holds significance for traders, as it encapsulates the average cost basis of Bitcoin owned by speculative hodlers - those who've held the cryptocurrency short-term, for a span not exceeding 155 days.
Bitcoin’s STH-RP has repeatedly functioned as solid support throughout the majority of bull markets commencing from early 2023. But the recent encroaching of this level has instigated a wave of anxiety among traders about a potential additional plummet in Bitcoin's valuation. The anonymous crypto trader Crypto Caesar commented on June 19, “Bitcoin's short-term holder realized price usually operates as a support in upwardly inclined markets". LookIntoBitcoin’s founder, Phillip Swift, added, “Let’s see if this holds true."
A downward spiral to a value of $60,000 could obliterate long positions worth $1.64 million, according to CoinGlass data. Despite its recent decline, Bitcoin's prolonged stability around the $65,000 mark, particularly in light of major events including January’s U.S. launch of spot Bitcoin ETFs and April’s Bitcoin halving, have traders speculating about its future trends. Cointelegraph reported on June 13 that currently Bitcoin is in its longest consolidation phase, spanning over 92 days, and analysts predict such enduring stability could prime the digital asset for an extensive upward rally.
CryptoQuant's CEO and founder, Ki Young Ju, suggests that Bitcoin's network fundamentals could possibly permit a market cap thrice its current size in comparison to the previous cyclical peak. On May 8, Young Ju highlighted the relation between Bitcoin's price volatility, its associated hash rate, and the market capitalisation ratio while stressing the resilience of the Bitcoin network. He proposed that if this ratio continues to grow, Bitcoin's price could potentially rise to $265,000.
Published At
6/22/2024 3:50:41 AM
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