Recent analysis indicates that Bitcoin has consolidated within a crucial price range, which may serve as a significant support zone in the future.
Critical Range: $94,000 to $97,900 for Bitcoin
In a recent update via social media, crypto researcher Axel Adler Jr shed light on the vital support levels for Bitcoin. This particular range encompasses three established price lines that have consistently acted as support in previous trading scenarios.
Two of these lines are based on moving averages (MAs): the 111-day and 200-day averages. Moving averages are instrumental in identifying trends by calculating the average price over a specified period, providing traders with insights into long-term market movements.
Primarily, MAs are effective tools for smoothing out volatility in asset prices, making them preferable for gauging long-term trends rather than short-term fluctuations. The highlighted periods of 111 days and 200 days are especially relevant in the current analysis.
The third significant support line discussed is the Realized Price metric focused on short-term holders (STHs). This on-chain indicator tracks the average cost basis of Bitcoin users and is particularly pertinent for those who hold Bitcoin for shorter durations.
STHs are defined as investors who have acquired Bitcoin within the last 155 days. This group is one of the two major classifications of holders, with the other being long-term holders (LTHs), who have maintained their investments for longer periods.
When the Realized Price for STHs is below the current market price, it signifies that this group is enjoying unrealized gains. Conversely, if the Realized Price exceeds the market value, it indicates that these investors are facing losses.
Below is a chart that illustrates the trends of the three key metrics over recent years:
The graph vividly shows that the crucial support levels are tightly clustered between $94,000 and $97,900. Given Bitcoin’s historical responses to these lines, the area could potentially function as a strong support cushion should prices decline further.
However, this scenario hinges on the possibility of Bitcoin retracing to this range in the near future. While there has been a recent downtrend, the current pricing still hovers above this critical zone.
Current Bitcoin Pricing Trends
Following a peak near $109,000 at the start of the week, Bitcoin’s current valuation has dipped to approximately $104,300.
