Bitcoin's Breakout Above $73,800 Hinges on Bulls Overcoming Sell PressureWhile Bitcoin traders are optimistic about the price breaking free from its recent slump and surging to the $73,800 local resistance level, the reality is less rosy. Buyers need to show considerable conviction before Bitcoin can successfully break through these areas, which could trigger a significant amount of liquidations
Bitcoin's Breakout Above $73,800 Hinges on Bulls Overcoming Sell Pressure
While Bitcoin traders are optimistic about the price breaking free from its recent slump and surging to the $73,800 local resistance level, the reality is less rosy. Buyers need to show considerable conviction before Bitcoin can successfully break through these areas, which could trigger a significant amount of liquidations. Additionally, this bullish momentum needs to be sustained by fresh capital inflows, with the inflow from investors fearing a "fear of missing out" (FOMO) being the most desirable.
Currently, Bitcoin is moving sideways within the bearish price range from last week. Meanwhile, the coin is trading within the range of September 1s bearish candle, which had a significant price swing. Despite the spot price bouncing higher and finding support at the $56,500 - $57,000 support area, some traders remain skeptical.
Bitcoin needs to break above $70,000 to sustain the upside move, but this won't be easy. Here are a few reasons for caution:
- Potential Selling Pressure: According to IntoTheBlock, around 7 million addresses have purchased BTC between $61,700 and $70,500. These addresses are currently underwater, making them more likely to sell once the price gets closer to their break-even points. IntoTheBlock's data analysts say this continuous selling pressure from these addresses, along with motivated selling for safety, will prevent BTC from making a substantial move higher and hitting a new all-time high.
- Breaking $70,000 is Challenging: To achieve a surge, bulls need to sustain the momentum above $60,000 and decisively break through $70,000, ideally with increasing volume. Ideally, the market participation should surpass the volume seen on August 5, when the price bottomed out at $49,000 in early August.
However, there are factors that could support Bitcoin's price increase:
- Long-Term Holders (LTH) Holding Strong: Despite the 7 million addresses potentially selling BTC, a significant portion of the BTC supply is held by long-term holders (LTHs). LTHs are addresses that have held BTC for at least 155 days. According to IntoTheBlock, over 30% of the total supply has not been moved for over five years.
- Market Absorption of Supply: Another bullish factor that could support the price in the coming days is the market's absorption of supply from German authorities, the U.S. Department of Justice (DoJ), and Mt.Gox. One on-chain analyst has noted that this absorption is quite substantial.
- Reduction in "Paper" BTC: The reduction of "paper" BTC on derivative platforms like Binance could also provide price support.
In conclusion, whether Bitcoin breaks above $73,800 depends on whether the bulls can overcome resistance from potential selling pressure and market sentiment, and acquire new capital inflows to sustain the rally. The current Bitcoin movement is unclear, and investors need to carefully monitor market developments and make investment decisions cautiously.
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
