Popular crypto analyst Ali Martinez has issued a stark warning about Bitcoin’s potential for a significant price decline if critical support levels are breached. Sharing insights with his 104,000 followers, Martinez highlighted the risk of a 27% drop in Bitcoin’s value, which could spell trouble for the broader market.
UTXO Model Indicates Key Support Levels
Martinez utilized the Unspent Transaction Output (UTXO) Realized Price Distribution (URPD) model to analyze Bitcoin’s price movements. This model shows the number of coins last transacted within specific price ranges, offering a clear view of potential resistance and support zones.
According to this model, if Bitcoin’s price falls below $93,806, it could face a swift plunge to $70,085, a level investors should closely monitor. The data underscores the importance of maintaining key support levels to avoid a bearish scenario.
Investor Behavior Reflects Bearish Sentiment
The analyst also pointed out that some investors are preparing for a potential bear market. Large quantities of Bitcoin have been transferred to exchanges, signaling an increase in selling pressure. Last week alone, approximately 33,000 Bitcoin (worth $3.23 billion) were sent to exchanges, while $7.17 billion worth of Bitcoin profits were realized on December 23.
Adding to the concerns, the number of traders betting on Bitcoin’s rise has significantly decreased on Binance. Open long positions on the platform fell from 66.73% to 53.60%, indicating a growing bearish sentiment in the market.
Critical Support Levels Crucial for Stability
Martinez emphasized the importance of the $100,000 level serving as a strong support to stabilize the market. The IOMAP metric suggests that reclaiming this level as a support zone could be pivotal for restoring confidence and maintaining Bitcoin’s upward trajectory.
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