Despite widespread predictions that the price of Bitcoin (BTC) could skyrocket to $120k before the end of the year, the coin has hit a roadblock, currently trading below $97k. However, historical data shows that such retracements often provide opportunities for new Bitcoin buyers to stock up.
If this pattern continues to hold, Bitcoin price could close the year higher. This on-chain analysis reveals how this scenario could play out.
Bitcoin Again Offers a Rare Opportunity
Bitcoin price has dropped 12% in the past seven days, likely due to increased selling pressure as the holiday season approaches.
This pressure is reflected in the sharp decline in the Coinbase Premium Index, which measures buying and selling activity in the US. An increase in the index indicates strong buying pressure, while a decrease indicates increased selling.
Currently, this index points to significant selling pressure. However, in previous cycles, strong selling often attracted new buyers looking to purchase Bitcoin at lower prices. If this pattern repeats, BTC could experience renewed accumulation and potentially move higher.
Interestingly, cryptocurrency analyst MAC_D also agrees with this view, observing that the digital currency may be about to experience a rebound.
“History shows that this phenomenon is often temporary in bull markets, often attracting new buyers who see this as an opportunity. While it is unlikely that prices following this sharp decline are the bottom, if the bull market continues, a bottom could form soon, potentially leading to a rebound.” MAC_D emphasize on CryptoQuant.
Furthermore, the profit taking rate of Bitcoin Holders also supports this view. On December 16, profitable on-chain trading volume surpassed 250k BTC.
As of the time of this writing, the value has dropped to 58K, indicating that the decline in Bitcoin price has led investors to hold on to their money instead of liquidating assets. If this value continues to decline, a BTC bounce is likely.
BTC Price Forecast: Soon to Return Above 100 thousand USD
Based on the 4-hour chart, Bitcoin has found support at $92,888. As a result, the price found a stronger support level at $95,871. However, the Awesome Oscillator (AO) remains negative, which suggests bearish momentum.
However, with the green chart bars appearing, BTC could avoid another significant decline and trade higher. In that case, Bitcoin price could reach $104,299 in the short term. In an extremely positive market condition, this value could increase to $108,386.
On the contrary, if the price falls below the support mentioned above then this prediction may not be confirmed. If that happens, Bitcoin price could drop to $92,144.
