Bitcoin price’s ongoing consolidation between the $96.8K resistance and $84K support levels is drawing attention.
UTXO data reveals these price ranges as pivotal for market sentiment, with key risk resets needed for a successful rally ahead.
UTXO Data Reveals Bitcoin’s Resistance and Support Zones
As per CryptoQuant data, Bitcoin’s price was making its way lower inside the average spend range of two key UTXO age cohorts.
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In other words, the 1-day cohort averaged purchase price was $96.8K, and the 1-day through 1-week cohort was $95.3K.
More importantly, these price levels are important zones of influence on the market sentiment. The 1 week to 1 month cohort provides additional support for Bitcoin’s price, with an average purchase at $84K.
This layer of support could provide stability in case of downward pressure and would help strengthen the current Bitcoin price range.
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The analysis also emphasizes how historical purchase levels across different age bands have played an indispensable role in Bitcoin’s price action and how they give us insight into crucial support and resistance zones.
Historical Patterns Suggest Consolidation Before Bitcoin’s Upward Surge
Moreover, Bitcoin’s latest price recovery made a lower high, prolonging a corrective phase in this market. The current bounce was seen as a normal and healthy evolution for Bitcoin growth.
Prior to any major Bitcoin price rally, the analyst advises investing in resetting Bitcoin’s short-term risk metrics. Such a reset could stabilize the market and set a solid base for sustaining upward momentum.
According to the chart, Bitcoin’s history of market corrections and volatility can be related to the charting signal of a prolonged consolidation. This could set a healthier long-term price path.
Imbalance in Rewards and Difficulty May Impact Network Stability
The Miner Profit/Loss Sustainability metric has become ‘extremely overpaid’, meaning Bitcoin mining economics were imbalanced.
According to the metric, block rewards grew faster than mining difficulty, which may distort miners’ profitability.
The scenario of an overpayment could suggest that despite the current mining landscape being inefficiently high on block rewards and low on expected difficulty adjustments.
A trend like this may prod miners to alter their ways and even consider fresh approaches to remain profitable.
The increasing inequality between block rewards and mining difficulty puts the future of long-term network stability in question. If such a balance endures, it may undermine Bitcoin’s economic model for mining incentives.
Bitcoin Trading Volume Remains Resilient Above $100B
Around November 16th, Bitcoin’s trading volume peaked and reached peaks of roughly $200 Billion.
Since then, however, the volume has pulled back but minimally dropped below the $100 Billion range. This suggests there is sustained market activity despite a relative decline from recent levels.
Since February, periods of high volatility have coincided with key moves in price. This means Bitcoin’s trading volume has exhibited sustained spikes over that time period.
Interestingly, Bitcoin’s price went above $90,000, buoyed by it being surrounded by high volumes of Bitcoin trading in the major market events.
This data shows a fair level of market engagement as Bitcoin trades above $100 Billion even after the top. The sustained volume indicates that Bitcoin is a top cryptocurrency with high investor and liquidity.
