Bitcoin is currently displaying strength, adding nearly 30% after dipping to as low as $49,000 in early August. With bullish momentum building and fundamental factors swinging in favor of the world’s most valuable cryptocurrency, prices are still hovering below the crucial $65,000 mark. Analyzing the daily chart indicates that this reaction level aligns with the highs seen in August.
Technically speaking, if buyers muster the necessary momentum to break above this level, Bitcoin could potentially soar to $70,000, a significant psychological barrier, and even breach $72,000. Achieving this would mark the first time since June that bulls have successfully overcome resistance at this reaction level.
Bitcoin Rising As Selling Pressure Drops: Why Is $65,000 Hard To Break?
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The inability of buyers to surpass the $65,000 mark comes as on-chain data reveals that sellers are losing momentum. Following concerns in early September, the subsequent price rebound has led traders to adjust their strategies, focusing on long positions and minimizing losses.
According to an analyst on X, referencing trading data, there has been a noticeable decline in Bitcoin sales at a loss over the past week. The Bitcoin realized cap indicates that traders’ losses dipped below $5 million, settling at $4.7 million. This suggests that sellers are no longer willing to offload their coins at a loss. Consequently, the reduction in selling pressure should theoretically bolster the bulls, creating a foundation for further gains.
Observing the candlestick arrangement on the daily chart, the immediate resistance level is $65,000. However, despite high confidence, bulls have struggled to breach this liquidation level.
Bitcoin Sharpe Ratio At 11.8%: More Room For Growth
As selling pressure diminishes, the analyst also highlighted that the Bitcoin Sharpe ratio stands around 11.8%. On-chain analysts use this ratio to gauge risk-adjusted returns relative to United States treasuries. At this level, it indicates that Bitcoin holders have been profitable over the past year, outperforming bondholders.
Typically, when the Bitcoin Sharpe ratio reaches around 20%, it signifies a market top. Since the current ratio is at 11.8%, it suggests there is still room for growth before hitting a speculative peak.
In conclusion, the current market dynamics, including decreasing selling pressure and a favorable Sharpe ratio, suggest that Bitcoin has the potential to break through key resistance levels and continue its upward trajectory. Traders and investors should closely monitor these indicators as they navigate the evolving cryptocurrency landscape.
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