Bitcoin: Why a move to $30k is more plausible than a fall below $29k
- For Bitcoin to beat the resistance around $30,000, the volume around the previous buying pressure needs to be higher.
- BTC accumulation is increasing and could be followed by a rise in volatility.
After blasting past $29,000, optimism in the market has started to rise again, with many opining that Bitcoin’s [BTC] journey to $30,000 was a question of when not if. However, according to IntoTheBlock’s data, it may not be an easy ride to the said price. This is because of a potential resistance around the $30,000 mark.
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Bitcoin is in a critical position
In spite of the fact that 73% of Bitcoin holders were now in profit, the blockchain insight platform noted that the resistance may occur because of the over 1.4 million addresses that accumulated in the region.
As Bitcoin is inching closer to $30k, we find that the most significant potential resistance is also around that $30k mark, where 1.49M addresses acquired Bitcoin.
At the same time, 73% of Bitcoin addresses are currently in profit. This level has proven to be a significant… pic.twitter.com/OymqUOQ4Hw
— IntoTheBlock (@intotheblock) October 20, 2023
One reason why this region was also important was due to the historical demand BTC had at this level. For instance, institutional investors like Michael Saylor’s Microstrategy, and Elon Musk’s Tesla purchased high volumes of BTC around these prices.
It was also the same case with a number of retail participants. Therefore, it is likely that some market players might try to break even at these points. This could, in turn, draw back the upward movement experienced lately.
A smooth sail may be coming
To avoid such an occurrence, a lot of accumulation has to take place, and it may need to be more than 496 BTC stockpiled previously at the $29,796 to $30,673 region. Well, data from Glasssnode showed that Bitcoin’s accumulation trend score was 0.72 at press time.
As a value ranging from zero to one, the accumulation trend score is an indicator that reflects the relative size of entities that are actively accumulating coins on-chain in terms of their BTC holdings.
Whenever the value of the metric is closer to zero, it means that the market is in distribution mode. Thus, the value mentioned above means that there has been more accumulation than distribution.
Hence, the chances of Bitcoin hitting $30,000 is much higher than a fall below $29,000.
As Bitcoin tries to move higher than the price at press time, it is also likely to see a surge in volatility. This was the opinion of Korean on-chain analyst Mignolet. Mignolet, who made his opinion known on CryptoQuant, noted that 3-6 months Spent Output Age Bands (SOAB) was proof of the hike in price fluctuations.
How much are 1,10,100 BTCs worth today?
The SOAB is a bundle of all spent outputs that were created within a specified age band. The metric is responsible for revealing the behavior of holders in a certain market atmosphere. Regarding the recent movement, the analyst explained that,
“The significant movements of around 120,000 during this period can be used as a volatility indicator. We might see significant volatility soon.”