Bitcoin Analysis: Swift Reversal at $53K – Will BTC Price Hit $60,000 or $40,000 First?

• Bitcoin’s attempt to breach the critical $53,000 mark faced strong resistance, indicating a phase of consolidation before any significant breakthrough.
• Glassnode data reveals a diminishing supply of Bitcoin held at a loss among Long-Term Holders (LTH), signaling increasing profitability for investors. 

Bitcoin (BTC) faced strong opposition yet again as it approached the critical $53,000 mark on Tuesday, indicating that the leading cryptocurrency is poised for further consolidation before making its next significant leap. After a tranquil three-day weekend in the U.S., Bitcoin experienced a swift climb from $51,600 to nearly $53,000 during the early hours of Tuesday in the U.S.

However, this upward momentum was short-lived as selling pressure swiftly ensued, causing prices to plummet to as low as $50,700. As of press time, Bitcoin is trading 1.02% down at a price of $51,200 and a market cap of $1.005billion.

The unsuccessful push past the $53,000 mark might signal an extended period of consolidation within the existing range. After surging more than 30% following the post-Bitcoin ETF correction in late January, prices seem to be pausing for a breather. This particular Bitcoin price range holds significant importance as a resistance zone on long-term charts, having previously limited rallies during the latter part of 2021. In a Tuesday note to investors, Vetle Lunde, senior analyst at K33 Research, wrote:

“The current price level is an important technical level for BTC, coinciding with both the peak of the September 2021 ‘El Salvador’ rally and the resistance ahead of the December 4 crash of the same year”.

As per CryptoCon’s chart shared on X, Bitcoin’s price retraced to comparable levels seen in the previous two bull markets. This retracement was followed by an extended consolidation phase. Historically, breakouts to higher prices occurred in the later stages of Bitcoin’s market cycle, typically after the quadrennial Bitcoin halving event.

Simply put, the Weekly Ichimoku Cloud says that a break of the cloud top point at $52,800 marks the run to #Bitcoin ATHs and the cycle top.

A break of this point now would be almost an entire year earlier than usual, as most occur during the transition from Blue Year… pic.twitter.com/I0XTbgnNpB

— CryptoCon (@CryptoCon_) February 20, 2024

Bitcoin Price Downside Possibility

Michaël van de Poppe, the founder and CEO of MN Trading Consultancy, echoed this viewpoint in a post on X, indicating that he is “still inclined towards the scenario where a downward flush appears likely.”

According to Poppe’s analysis, the range to monitor is between $48,500 and $49,500. Although a significant drop like this might unsettle individuals riding the momentum of a pre-halving rally, recent market trends have shown that the bulls can swiftly absorb the downturns. This could potentially lead Bitcoin to resume its upward trajectory after acquiring new liquidity.

At this point, I'm still leaning towards this scenario in which a flush on the downside seems likely.

What's the key zone to watch?

I think $48.5-49.5K area for #Bitcoin. pic.twitter.com/9bsKRgglu1

— Michaël van de Poppe (@CryptoMichNL) February 20, 2024

The surge in Bitcoin’s price since the fourth quarter of last year has consistently transformed BTC holdings into profitable assets. Glassnode, a blockchain data analytics firm, reports that the supply of Bitcoin held by Long-Term Holders (LTH) at a loss has dwindled to just 778.8k BTC, equating to 6.5% of the supply within this group. This marks the first time since the onset of bullish market conditions in 2019 that LTH supply has reached such low levels.

We can see that the total volume of #Bitcoin LTH Supply held in loss is currently 777.8k BTC, and is trending towards the zero bound as prices rise. Just 6.5% of the aggregate LTH supply is therefore held in loss.

Previous instances where the LTH cohort held a similar coin… pic.twitter.com/AMMAShSylq

— glassnode (@glassnode) February 19, 2024