Bitcoin has descended to its lowest point in a month, causing traders to ponder whether their BTC price predictions will come to fruition.
As concerns mount regarding a drop below $60,000, the collective cost of various hodlers is now becoming a significant factor. The price floor for BTC is closely tied to hodlers’ cost basis.
On June 14, Bitcoin surprised the market with a 3.5% decline, driving BTC/USD down to $64,950 on Bitstamp. This move added to the week’s losses, totaling over 6.7%, and led to the lowest BTC price levels seen since mid-May, according to data from Cointelegraph Markets Pro and TradingView.
Keith Alan, co-founder of trading resource Material Indicators, noted the loss of technical support at the 50-Day Moving Average in his market analysis.
While $65,000 managed to hold as a support level, many are now searching for potential areas where BTC’s price could find a floor in the near term, as achieving new all-time highs seems increasingly challenging.
Axel Adler Jr., a contributor to the onchain analytics platform CryptoQuant, believes that the cost bases of hodlers will face a fresh test in the market. These levels, known as realized prices, represent the average buy-in price for investors holding coins for various durations.
Short-term holders (STHs), who hold BTC for up to 155 days, have been crucial in supporting the bull market, with their cost basis currently at $62,200. Investors holding BTC for three to six months have a realized price of $55,500, while long-term holders have their cost basis at $24,300.
Adler commented on how the duration of the correction will be determined by the market, citing past cycles where similar situations lasted between 65 to 371 days.
On the other hand, traders are keeping a close eye on the possibility of an “illiquid squeeze” in the market. Concerns about BTC potentially dropping back to $60,000 persist, with some speculating that the price could plummet as low as $48,000.
Exchange order book activity is also being closely monitored, with traders like Skew noting significant bid liquidity around $62,000. Data from CoinGlass shows a growing line of liquidity at $64,900, just below the intraday lows.
This article does not provide investment advice. Every investment and trading decision carries risks, and readers are encouraged to conduct their own research before making any decisions.