In the world of cryptocurrency, tumultuous twists and turns are nothing new. In the past week, Bitcoin, the flagship digital currency, has experienced a rather disappointing dip of 4.65% in its market prices according to the numbers from CoinMarketCap. Despite this slump, things could be looking even more dire for the cryptocurrency giant.
Esteemed cryptocurrency analyst Ali Martinez has issued a price alert warning of an impending downfall if Bitcoin is unable to hold fast to a crucial support zone.
Martinez shared his analysis in a post on June 15, expressing that Bitcoin was precariously perched on a financial cliff edge. The digital currency needed to inflate its market value post haste to exceed $66,254 to sidestep a probable nosedive plummeting towards the $61,100 price range. He backed his statement through the utilization of the UTXO Realized Price Distribution (URPD) chart, created by the data analytics program, Glassnode.
A rather complicated affair to the unacquainted, the UTXO, or the Unspent Transaction Output, refers to those units of Bitcoin that have not been expended following a transaction. The URPD chart breaks down Bitcoin’s supply based on the realized prices of UTXOs. By showing how much Bitcoin was procured at varied levels, the chart can then be considered a tool for studying market sentiment and distribution analysis, and for scrutinizing investor behavior.
This information has proven itself incredibly valuable in isolating key support and resistance levels. More crucially, the high concentration of UTXOs can hint at levels at which investors have predominantly purchased Bitcoin, potentially manifesting as a resistance or support level down the line.
The URPD chart presented by Martinez lays bare that 504,619 BTC was bought at the rate of $66,254. This suggests it could serve as a formidable support for Bitcoin as it grapples with its ongoing downward momentum. Should Bitcoin fail to recover to over $66,254, the next potential support would be $61,101. Here, 191,366 Bitcoin were purchased, as per Martinez’s shared chart.
Currently, Bitcoin’s trading price is hovering at $66,151, marking a fall of 1.15% over the previous day. Along with this deleterious slide, Bitcoin’s daily trading volume also experienced a depreciation of 5.54%, valued at $25.4 billion. Stringing together the monthly gains, however, Bitcoin still maintains a positive stance with an escalation of 5.80%. This comes as good news for long-term traders.
Yet, Coincodex has unveiled that the overarching sentiment veers towards the bearish. However, a fear and greed index standing at 74 indicates that investors are still willing to take risks, which signifies anticipation and optimism. This duality also alludes to the possibility of higher market volatility in the near future.
Ultimately a capricious battlefield, the world of cryptocurrency continues to keep its investors on tenterhooks, as Bitcoin hovers at a precipitous edge. The next few days will determine if the predictions of an imminent downturn will manifest or whether Bitcoin can once again prove its resilience to its naysayers.
