Despite displaying an admirable measure of strength year-to-date, Bitcoin has not been off to a good start this month, with the top cryptocurrency losing momentum due to recent market dynamics.
At press time, Bitcoin was trading at $25,537, reflecting a 6.18% drop in the past 24 hours, with investors now closely observing its movements and assessing the possibility of a new low in its price.
Recently, “Grizzly”, an analyst with onchain analysis firm Cryptoquant, highlighted the short-term support level for Bitcoin. According to him, the realized price for the 1–3-month age band is $27,200, which has historically been a crucial support level. If Bitcoin fails to reclaim this level, he noted that further support can be found at $25,300. Accordingly, failure to hold this level would likely send the price towards $20,000, the current realized price of the 3–6-month age band, according to the analyst.
However, according to “DanCoinInvestor”, an analyst at the same firm, a further decline in Bitcoin’s price to a new low is “very unlikely.” On Monday, June 5, the pundit noted that the crypto market was transitioning into a bull market phase, pointing out two key indicators supporting this notion. First, he highlighted the unrealized loss indicator, which measures how many market participants are currently losing money.
“The Unrealized Loss reached the bottoming zone (green) and then escaped, and now we are in the transition zone towards the bull market. FYI, it is normal for the peaks of this model to decrease from cycle to cycle, as shown in the chart, as BTC’s width of peaks and bottom narrow as the volume of the crypto market continues to grow,” he wrote.
Moreover, the analyst highlighted Bitcoin’s dip and recovery above the realized price (represented by the yellow line), stating BTC was now trading within a stable range. The realized price metric signifies the average purchasing price of the market participants. Despite the temporary drop, Bitcoin has maintained stability and is holding its ground within the established price range.
DanCoinInvestor further mentioned that although the crypto market may experience a decline in the fourth quarter of 2023 or early 2024, it is highly unlikely that Bitcoin will make a new low. Instead, he noted that any recession-induced drop would represent the last chance before entering the strong bull zone.
That said, whether Bitcoin can break through the abovementioned resistance and regain upward momentum or experience a deeper pullback remains to be seen as its price evolves. Moreover, perhaps the recent purchase of over 1 million BTC by about 2.36 million addresses between the $26,360 and $27,160 levels could keep price buoyed, as highlighted by popular analyst Ali Martinez on Sunday, June 4.
