Bitcoin’s price action clusters above the $71,600 mark indicate a possible further correction in the near future. The question on everyone’s mind is: How low will Bitcoin go before entering the parabolic phase?
The concept of price clusters in Bitcoin (BTC) refers to the tendency of prices to cluster around significant round numbers. An analysis of the BTC price clusters near the range high of $71,600 suggests that there may be more downside potential ahead, as highlighted by the well-known crypto analyst Rekt Capital.
In a post on June 17 to his substantial following of 477,000, the analyst pointed out the formation of BTC price clusters and their implications for the market. Bitcoin’s price reached a high of $71,949 on June 7, only to drop to its current level of $65,393. This represents a 5.7% decline on the weekly chart according to data from Bitstamp.
Rekt Capital also mentioned the possibility of Bitcoin needing to correct below the $64,000 mark in order to have a healthy reset before entering the much-anticipated “parabolic phase” of the bull market. However, another trader, Titan of Crypto, suggested that based on a technical formation on the monthly chart, Bitcoin could potentially fall even lower, below the $60,000 mark.
Looking at Bitcoin’s relative strength index (RSI), it appears that the asset might need to cool down further before embarking on its next upward movement. The RSI stood at 41 on June 17, indicating fair value for the asset. During the last major correction on May 1, the RSI fell to 33 as Bitcoin’s price dropped to $56,600 before bouncing back.
Liquidation levels suggest that Bitcoin has strong support around the $64,500 mark. If the price were to dip below this level, over $520 million worth of leveraged long positions could be liquidated according to Coinglass data. On the other hand, the cost basis for short-term holders (STHs) indicates that Bitcoin may find support above the $62,200 mark.
STHs, who hold BTC for up to 155 days, have a realized price of $62,200 according to CryptoQuant data. As this cohort represents the more speculative side of Bitcoin holders, their realized price could serve as a significant support level for Bitcoin’s price moving forward.
It is important to note that this article does not offer investment advice or recommendations. All investments involve risks, and readers are encouraged to conduct their own research before making any decisions.