By Nathan Ferguson
- BTC price weakens the demand region at $36,398 – $38,895 as it retests the zone for the 3rd time.
- On-chain metrics suggest Bitcoin can decline before discovering a steady bottom.
- A daily close beyond $52K will cancel the pessimistic narrative and launch a bullish run.
Bitcoin has its price stuck between critical zones without directional signals. The closest support floor that prevented massive retracements appears weak following retest, suggesting a potential downside break.
BTC Price and Capitulation Chances
BTC’s price has consolidated between $45K and 35K for the past two months. The late January crash faced a massive buying momentum, and Bitcoin closed beyond the support floor at $34,752. This zone remained crucial in preventing massive downside correction. Meanwhile, recoveries from the slump had BTC printing a demand zone in $36,398 – $38,895. Moreover, Bitcoin has respected this zone amid the coiling-up period, recording lucrative impulse actions from the region.
Nevertheless, the barrier seems to weaken as BTC tests it for the 3rd time. That way, Bitcoin can violate the level, plummeting towards the support of $34,752. A 24hr close beneath this footing can trigger a drop toward the psychological barrier at $30,000. That can see BTC extending lows to gather sell-stop liquidity beneath $29,100, 2021 July’s launchpad.
Conservatively, a plunge to $29,100might means a capitulation move, printing a possible bottom. In dire scenarios, breaking this level will push Bitcoin toward the 2nd possible bottom at $23,000.
The MVRV Z-score supports the steep retracement by BTC. The metric evaluates whether an asset is undervalued or overvalued. Bitcoin has its Z-score at 1.16, opening the path towards the green band. Such a move would need the BTC price to plunge lower than the current level.
Also, IntoTheBlock’s GIOM model backs BTC’s technical view. The index shows that about 5.06 million addresses bought around 2.45 million Bitcoins at a $23,251 average price. Therefore, this zone remains a critical support level and stretches between $11,443 and $36,754. Thus, ruining the $36,754 barrier might welcome downtrends towards $30K or $23,251.
Bitcoin needs a weekly or daily candle close past $52K to invalidate the bearish picture. Such a move would form a higher high and clear the road for BTC to explore high levels and revisit the psychological level at $60K. Sufficient buying momentum can push the leading crypto towards new record peaks at $80K.