Bitcoin Consolidates After Phenomenal Price Growth
Bitcoin is currently experiencing a period of consolidation and profit-taking following its impressive price growth over the past eight weeks. This year, the world’s largest cryptocurrency has seen significant gains, particularly starting in mid-October.
Pullback After Reaching Yearly High
After reaching a yearly high of $44,500 on December 8, the price of Bitcoin has pulled back by about 6%. This pullback suggests that some investors are taking profits. On-chain data from Glassnode indicates that Bitcoin’s fair value currently falls between $30,000 and $36,000 based on several pricing models.
Rally Pauses at Resistance Level
Bitcoin’s remarkable price appreciation this year resulted in a 150% gain that pushed it above $44,500. However, on-chain data reveals that the momentum has slowed down after encountering resistance at this price level.
Short-Term Investors Taking Profit
Many short-term investors have decided to capitalize on their holdings and take profit. Additionally, Whale Alerts data shows large BTC transactions into crypto exchanges in recent days, suggesting that some whale addresses may also be participating in the selloff.
Possible Months of Movements at Current Fair Value
If history repeats itself, Bitcoin could experience several more months of movements around its current fair value of $36,000. Crypto analyst Ali Martinez notes strong support between $37,150 and $38,360 based on IntoTheBlock data. This support is backed by 1.52 million addresses holding 534,000 BTC.
Resumption of Bullish Trend and Key Resistance Levels
To resume its bullish trend, Bitcoin would need to overcome two resistance walls at $43,850 and $46,400. These levels will be crucial to watch for the cryptocurrency’s future price movements.
Hot Take: Bitcoin Consolidates After Impressive Rally
Bitcoin’s recent consolidation and profit-taking indicate a temporary pause in its remarkable price rally. After reaching a yearly high of $44,500, the cryptocurrency has pulled back as investors take profits. On-chain data suggests that Bitcoin’s fair value is currently between $30,000 and $36,000. While short-term investors capitalize on their holdings and some whale addresses participate in the selloff, Bitcoin may experience several months of movements around its current fair value. Strong support is seen between $37,150 and $38,360, while key resistance levels to watch are at $43,850 and $46,400 for the resumption of a bullish trend.
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