After the Federal Reserve decided to cut interest rates in September, Bitcoin has been on a volatile but mostly bull market. Analysts and investors are currently patiently waiting for the next rally as BTC recently stopped at the $69,400 level and has found strong support near $66,000. This level is important because it can determine Bitcoin's next price move.
CryptoQuant’s key data shows that Bitcoin’s average profitability index is currently 202%, meaning the price is approximately double the realized price. This indicator gives confidence to investors and traders who expect Bitcoin to continue rising.
Profitability remains well below the level that typically triggers heavy profit-taking, suggesting there is more room for Bitcoin to grow before significant selling pressure emerges.
The coming weeks will be important, as strength in Bitcoin above $66,000 could pave the way for a breakout above $70,000, while failure to hold this support could lead to an even deeper retrace. Many people think that it will be.
Bitcoin investors waiting for a rise
CryptoQuant data shared by on-chain analyst Axel Adler reveals insights into Bitcoin's current market conditions, but may not dictate immediate price action in the coming days. Adler highlighted X's Bitcoin Average Profitability Index as investors remain hopeful that BTC will continue to rise and challenge all-time highs.
This index serves as a key indicator of market sentiment, and reading above 300% often suggests that investors will begin actively taking profits.
The index is 202%, indicating that we may be halfway to that critical threshold. This suggests that while there is still plenty of room for prices to rise, we are nearing a point where profit-taking could become widespread.
When the Average Profitability Index reaches the 300% mark, selling pressure can become strong enough to trigger a correction event, pushing the price down.
However, it is important to note that average profitability remains relatively low compared to previous cycle tops. This situation means that current market sentiment is unlikely to lead to a significant decline, as many investors still see value in holding positions despite the potential for increased selling pressure. It suggests that there is no.
Overall, while Adler's analysis provides valuable insight into potential market movements, Bitcoin's future price movements will depend on broader market dynamics and how investors navigate this evolving landscape. Depends on sentiment.
BTC held above key demand levels
Bitcoin (BTC) is currently trading at $66,400 after facing rejection from the $69,400 supply level. The price remains solid and remains above the important $66,000 level, which will play a pivotal role in determining the direction of BTC in the coming days.
Assume that BTC fails to sustain this support level. In that case, it could seek liquidity at lower levels around $64,000, a key price range that coincides with the 4-hour 200 moving average (MA) and exponential moving average (EMA). This potential decline could cause increased selling pressure as traders look for confirmation of a trend reversal.
On the other hand, if Bitcoin can sustain above $66,000, it will be ready to challenge the $69,000 resistance again. A break above this level could pave the way for BTC to reach the psychological milestone of $70,000.
The next few trading sessions will be critical in gauging market sentiment and investor behavior as traders consider options amid continued volatility. Ultimately, whether BTC is able to maintain its current support will have a major impact on the price trajectory, and the $66,000 level will be a key area to closely monitor in the coming days.
Featured image from Dall-E, chart from TradingView
