Here Is The Key Level To Watch Out For

• Bitcoin was trading below $66k at press time, with analysts pointing to $71k as a key level for a bullish reversal.
• Short-term holder supply declines, indicating growing confidence in the market, while open interest sees mixed signals.

Bitcoin [BTC] has experienced a slight decline, currently trading at around $61,639, down by 3.5% in the past day. This decrease comes shortly after the leading cryptocurrency made a notable recovery last week, reaching as high as $66,000.

Despite the recent dip, Bitcoin was still up by 9.4% over the last two weeks. 

While no clear factors have been identified for the current downward movement, analysts are observing several trends and key levels that Bitcoin holders should pay attention to as they evaluate the asset’s future price trajectory.

Key levels and shifts among Bitcoin holders

Veteran trader Peter Brandt recently shared his analysis on the Bitcoin market, emphasizing a crucial level for bulls to reclaim. 

According to Brandt, Bitcoin holders and investors should monitor whether BTC closes above $71,000, confirmed by a new all-time high (ATH), to indicate that the upward trend since November 2022 is still in force.

Brandt mentioned in his post,

“The recent rally in Bitcoin did NOT disturb the 7-month sequence of lower highs and lower lows.”

Meanwhile, recent data from CryptoQuant has highlighted a shift among Bitcoin holders, particularly short-term holders (STHs). The total supply of Bitcoin held by STHs has decreased by approximately 1.31 million BTC (around $83 billion). 

Source: CryptoQuant

Axel Adler Jr, a CryptoQuant analyst, elaborated that this decline suggests “growing market confidence,” as fewer BTC are circulating among STHs who are opting to hold their assets (HODL).

Additionally, while some short-term holders have realized profits by selling their coins, the general trend indicates a move towards longer-term holding strategies.

Adding to the discussion on market sentiment, prominent crypto analyst Willy Woo shared his thoughts on the current and future structure of Bitcoin’s price. 

He suggested that the mid-term outlook is moving from bearish to neutral, and could be on its way to becoming bullish. Woo also predicted that a new all-time high for Bitcoin may take time, with the next bullish attempt potentially coming after a “cool-off” period of 1-3 weeks.

In his view, October might remain flat, but the months of November and December could see increased bullish activity.

Open interest and active addresses indicate mixed trends

Beyond the insights of individual analysts, market metrics provide additional perspective on the state of Bitcoin.

Open interest, a key indicator of the total number of outstanding derivative contracts, is one area closely watched by Bitcoin holders.

According to data from Coinglass, Bitcoin’s open interest has recently declined by 4.52%, standing at $32.92 billion. 

Source: Coinglass

Conversely, open interest volume has seen a surge, rising by 61.23% to reach $101.57 billion. This increase in volume, despite the dip in overall open interest, suggests that trading activity and interest in Bitcoin derivatives are growing, although it remains unclear if this growth will translate into a sustained price rally.

Another key metric is the number of active Bitcoin addresses, which has been showing signs of recovery.

Read Bitcoin’s [BTC] Price Prediction 2024-25

The metric has increased significantly, with over 863,576 active addresses as of press time, marking a substantial rise from the 603,000 active addresses seen early last month. 

Source: Coinglass

This rise in activity may be an indicator of renewed market engagement and potentially signals a shift towards increased usage and trading among Bitcoin holders.