As the crypto market entered the second month of 2023, investors witnessed noticeable volatility in the Bitcoin price chart. After an enjoyable bullish session in January, BTC price is now recording multiple higher highs and lows, creating turmoil among traders.
However, the critical factors affecting Bitcoin’s price are the regulatory steps and legal actions taken by the SEC and the worldwide decline in crypto adoption. However, Bitcoin seems to have ended its downtrend, as it has been hovering in bullish territory for the last few days.
Investors Bet Long On Bitcoin’s Volatility
Bitcoin’s market capitalization has surpassed that of payment processing giant Visa once again, as its price witnessed a 48% surge since January. Moreover, the strong battle between Visa and Bitcoin has surprised investors with its future potential to give tough competition to the traditional financial market.
According to on-chain analytic firm CryptoQuant, the 7-day MA of Bitcoin Puell Multiple has touched a 14-month high. In addition, the firm highlighted that the BTC price was trading approximately at $48,000 the last time Puell Multiple was at the current level. This metric calculates the ratio between the daily earnings made by Bitcoin miners and the 365-day moving average of their earnings.
When the value of the Puell Multiple trades is above 1, it indicates that miners are currently in profit and earning more than the yearly average. Conversely, if this metric reaches extremely high levels above the one mark, it is more likely for miners to sell as they tend toward booking profits.
Moreover, the firm clarified that when the indicator forms an ascending pattern above 1, it hints that miners are more comfortable with the current BTC price trend, and the probability of selling assets gradually decreases. Hence, it makes the Bitcoin price more stable with less volatility, developing a bullish scenario for investors.
Will Bitcoin Soon Break The $25K Level?
BTC’s price has sparked a glimmer of hope as it gained its momentum back and is heading toward the crucial resistance level of $25K. However, investors are worried whether Bitcoin will be able to successfully hold its trend above $25K or drop heavily.
As of writing, Bitcoin trades at $24,879, with a gain of nearly 1% in the last 24 hours. BTC recently made another effort to surpass the $25,000 resistance zone and gain momentum. Unfortunately, the attempt was unsuccessful as the digital asset was unable to hold above the $25,200 level and subsequently experienced a fresh decline.
Looking at the daily price chart, Bitcoin may initiate a downtrend soon after breaking the support at the $24K level. It is predicted that Bitcoin price may reach the buyer zone of $23.3K-$23.8K to spark a fresh increase to $25K. Moreover, the RSI-14 is trading on the boundary of an overbought region, weakening the bullish momentum of a trend continuation above $25K.
Source: https://coinpedia.org/price-analysis/is-bitcoin-price-preparing-for-a-plunge-to-20k/