Key Points
- Bitcoin’s volatility is increasing, potentially indicating a price drop below $60,000.
- Almost 10% of Bitcoin holders are currently at a loss, which could lead to further price decline.
Bitcoin’s Crucial Juncture
As the much-anticipated 4th halving of Bitcoin [BTC] approaches, the cryptocurrency finds itself at a critical point. Data from IntoTheBlock reveals that nearly 10% of BTC holders are currently experiencing losses.
This increase in loss-making holders could be attributed to Bitcoin’s recent price drop from over $70,000 to $62,324. However, it’s not the only threat to BTC. According to the same data, Bitcoin’s price could further plunge and settle between $56,000 and $60,000 if the number of loss-making holders exceeds 10%.
Historical Data and Volatility
To understand this possibility, the coin’s volatility was analyzed using the on-chain analytics platform Santiment. At the time of writing, the one-day volatility had risen to 0.016. The higher the volatility, the higher the potential returns, but it also has the capacity to trigger a significant downward move.
If the selling pressure increases, a decline to $56,000 could be possible. However, an increase in buying pressure could change the forecast and push BTC’s price upward.
Short Term Holder Supply
Meanwhile, data from Glassnode shows that the Short Term Holder (STH) supply of Bitcoin has increased from 3.40 million to 3.42 million since 14 April. This metric represents the total amount of circulating supply held by short-term investors. If it tightens, it usually indicates a bullish scenario.
However, this might not be the case for BTC as the potential implication could spell danger for the crypto’s price. If the STH supply stalls, the price of the coin might hold above $62,000. Conversely, an increase in the supply could trigger a downturn, potentially driving the value as low as $56,000.
Despite the bearish bias, social dominance has increased to 30.31%. This surge could be linked to the upcoming halving event, which many believe will be a game-changer for BTC this cycle. In contrast, the aggregated Funding Rate has decreased, suggesting that traders are slowing down their bullish bets.
With the price moving lower and perp buyers reducing aggression, Bitcoin might lack the strength to invalidate the possible decline. If this remains the case when the halving takes place, a fall on the charts can be expected.
