Key Points
- Bitcoin has been experiencing consistent volatility around the $60,000 price range due to increased selling pressure.
- Over 8.6 million addresses are holding BTC at a loss, which contributes to the difficulty in maintaining the $60,000 price range.
Bitcoin’s Struggles Around $60,000
Bitcoin [BTC] has had a tumultuous few weeks, its price fluctuating significantly around the $60,000 to $61,000 range. It seems to approach this price range only to decline shortly afterward.
This volatility is largely due to the high number of holders currently at a loss. On 27th August, Bitcoin fell from the $60,000 level, starting the day at approximately $62,840 and closing at around $59,433.
Increased Selling Pressure Affecting Bitcoin
Since that drop, Bitcoin has struggled to reclaim the $60,000 mark, despite occasionally reaching that level during various trading sessions. The highest Bitcoin managed to reach was around $59,000, but it quickly declined from that range.
This repeated inability to maintain an uptrend at or above $60,000 suggests a significant resistance level at this price point. The primary reason for this seems to be the increased selling pressure whenever the price approaches or exceeds the $60,000 range.
As Bitcoin’s price rises, many holders, especially those who bought at higher prices, may choose to sell to either break even or secure profits. This selling activity generates downward pressure, preventing the price from holding steady above these key levels.
Large Number of Holders at a Loss
Data from IntoTheBlock shows that a significant number of addresses purchased Bitcoin at higher price levels, particularly in the $61,705 to $72,500 range. Over 6.9 million addresses bought Bitcoin within this price range.
Furthermore, another substantial group of holders bought BTC at prices between $59,000 and $61,000, totaling approximately 1.7 million addresses. This means that over 8.6 million addresses, representing around 16.08% of all BTC holders, are currently holding their BTC at a loss.
This concentration of holders at a loss explains the difficulty BTC has faced in breaking and maintaining the $60,000 price range in recent weeks.
A Shift in Market Sentiment Needed
For BTC to break through this resistance and maintain higher price levels, the market would need to absorb this selling pressure. This could happen if there is a significant influx of new buyers willing to purchase Bitcoin at these levels or if market sentiment shifts in a way that encourages holders to retain their positions rather than sell.
According to data from Glassnode, the number of new addresses dropped significantly after 30th August, falling from approximately 338,000 to around 287,000. As of this writing, the number of new addresses has slightly recovered to around 296,000.
