Key Points
- Over a million users bought BTC at $94K, marking it as a key support for an upward move.
- Despite recent sell-offs, a sharp BTC pullback can’t be overruled as key metrics flash red flags.
Bitcoin [BTC] has established a strong support at $94K, despite recent sell-offs. It was valued at $98K ahead of key US inflation data (CPI).
This week’s macroeconomic updates, including inflation and labor market data, could trigger drastic price fluctuations. The data will determine the pace of Federal Reserve interest cuts from December 18. The market is currently pricing a 25bps interest rate cut.
Another BTC Crash?
Interestingly, BTC still holds the short-term channel and the $94K aligns with the range lows. The question remains whether it will hold or crack post-CPI data.
According to BTC trader Skew, there is strong demand between $90K and $95K. This suggests that BTC might have stabilized at these levels with $97K as an equilibrium point. Part of his analysis reads, ““I think the market is or has found its equilibrium here…The market continues to add bid liquidity around current lows $95K – $90K as well passive buying is present in these two sweeps so far.””
Blockchain analytics firm, IntoTheBlock, also confirmed strong bid levels above $90K. They noted that, ““The real demand zone emerges between $94,800 and $97,700, where over 1.3 million addresses have accumulated Bitcoin. This range represents a critical area for potential support.””
In other words, $94K is a crucial demand zone and springboard for a potential move to the $105K target. However, a drop below $94K could put over 1 million addresses underwater, potentially leading to panic selling and dragging BTC lower.
The NVT Golden Cross metric supports this potential bearish scenario. This metric has marked previous local tops and bottoms. It first flagged an imminent BTC local top in late November and has remained sticky despite this week’s shake-outs. This suggests that despite recent pullbacks, BTC might not be out of the woods yet.
Furthermore, the MVRV has recently soared towards an overheated territory, signaling a likely pullback. This implies that BTC could still surge above $100K, but a sharp pullback can’t be ruled out.
