Despite many forecasts that the price of Bitcoin (BTC) could skyrocket to $120,000 before the end of the year, this cryptocurrency is facing an obstacle as it is trading below the $97,000 mark. However, historical data shows that such corrections often bring opportunities for new investors to accumulate Bitcoin.
If this pattern continues, the Bitcoin price could end the year at a higher level. The on-chain analysis below will clarify this scenario.
The Bitcoin price has dropped 12% in the past 7 days, which may be due to increased selling pressure as the holiday season begins.
This pressure is reflected in the sharp decline of the Coinbase Premium Index, a tool that measures Bitcoin buying and selling activity in the US. When the index rises, it signals strong buying pressure; conversely, when it declines, it indicates high selling pressure.
Currently, this index indicates significant selling pressure. However, in previous cycles, increased selling pressure often attracts new investors who want to buy Bitcoin at lower prices. If this scenario repeats, Bitcoin could witness new accumulation and price appreciation potential.
Notably, analyst MAC_D also agrees with this view, stating that this cryptocurrency could soon recover.
"History shows that this phenomenon is usually temporary in bull markets, and often attracts new buyers who see it as an opportunity. While we cannot confirm the bottom price after this sharp decline, if the market continues to rise, the bottom could form soon, opening up the potential for recovery," MAC_D commented on CryptoQuant.
Furthermore, the Bitcoin investor realized profit-taking ratio also supports this outlook. On December 16, the on-chain trading volume in profit exceeded 250,000 BTC.
At the time of writing, this figure has dropped to 58,100 BTC, indicating that the Bitcoin price decline is causing investors to hold their assets rather than sell them off. If this trend continues, it is highly likely that BTC will soon rebound.
Based on the 4-hour chart, Bitcoin has found support at $92,888. From there, the price has established a stronger support level at $95,871. However, the Awesome Oscillator (AO) is still in negative territory, indicating that the downward momentum is still present.
However, with the appearance of green histogram bars, BTC may avoid another significant price drop and trade at higher levels. In this case, the Bitcoin price could reach $104,299 in the short term. If the market becomes extremely bullish, the price could rise to $108,386.
Conversely, if the price drops below the mentioned support level, this forecast may no longer be accurate. In that case, the Bitcoin price could decline to $92,144.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making investment decisions. We are not responsible for your investment decisions.
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According to Beincrypto
