Bitcoin (BTC) is currently working towards recovering from the losses it faced in July. However, as it aims to bounce back, new obstacles are emerging on the horizon. Onchain data indicates a potential resistance level at $65,000 for the leading cryptocurrency by market value. As of the latest data, BTC is trading nearly 1% higher at $63,200, seeking to regain momentum after a 7% decline in June. The drop in June was primarily attributed to miner selling and concerns regarding arbitrage activities related to ETF inflows rather than outright bullish sentiment. The recent decline has pushed BTC prices below the aggregate cost basis of short-term bitcoin holders. Short-term holders, defined as wallets storing coins for 155 days or less, have an aggregate cost basis of $65,000 according to LookIntoBitcoin. This means that these holders are currently facing losses or holding positions in the red, potentially leading to selling pressure around the $65,000 level. Analysts suggest that the price of bitcoin could encounter resistance near $65,000 as short-term market speculators may seek to exit their positions at breakeven levels. Historically, when BTC fell below the aggregate cost basis of short-term holders, the price traded sideways before breaking out again. On the other hand, long-term holder wallets have a strong incentive to hold or increase their bitcoin holdings as their average cost basis is significantly lower, at around $20,000. This stark difference in cost basis illustrates the stark contrast between short-term and long-term holders in terms of profitability. Despite the 15% price pullback from the record high in March, BTC’s correction is considered normal within the context of a bull market. Market analysts point out that volatility in bitcoin’s price helps to weed out weak investors and presents strategic investment opportunities for those with a longer time horizon. Overall, the current onchain data analysis suggests that bitcoin is facing a critical resistance level at $65,000, with short-term holders potentially influencing price action in the near term. Long-term holders, on the other hand, remain steadfast in their belief in the digital asset’s long-term potential.
Bitcoin Challenges and Onchain Data Analysis
12/07/2024
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Explore the challenges encountered by Bitcoin and conduct a detailed on-chain data analysis to reveal insights and trends in the cryptocurrency world.