The crypto market has seen another volatile week, with Bitcoin failing to sustain its momentum above $70,000. The world’s largest cryptocurrency plummeted from highs around $73,000 down to the $68,000 level, leaving investors questioning where the next significant support could lie.
The drop caught the attention of popular crypto analyst Ash Crypto, who wrote on his X page. “IT’S OVER FOR BTC, $12K IS COMING.” While a worst case of Bitcoin falling over 80% from current levels seems highly unlikely to most analysts, the escalating sell-off has many wondering just how far the correction could go.
On-Chain Data Paints Mixed Picture
Crypto Market analytics platform, Santiment highlighted some of the on-chain data around the move, presenting both bullish and bearish signals. They noted that the spike in transaction volume revealed an extremely active Bitcoin network amid the volatility.
However, the platform also pointed to the “good news” that the number of Bitcoin holders is dropping again, “indicating needed capitulation.” This refers to the long-term holders who bought at higher prices finally throwing in the towel and selling, which can mark bottoms in Bitcoin’s price cycles.
The “bad news’ according to Santiment was that the number of opened long positions on derivative exchanges remains high, suggesting an unwinding of leverage could exacerbate any selloff.
Key Support Levels to Watch
While analyzing the key support level, crypto analyst Ali stated some important on-chain support and resistance levels for Bitcoin based on areas with a high concentration of investor positions.
Ali identified the $64,750 to $66,700 range as a “solid support” zone, which is being defended by over 382,000 addresses holding 275,000 BTC collectively. Losing this level could open the door for a move down towards the next demand area between $60,760 and $62,790, which has over 797,500 addresses holding nearly 300,000 BTC.
On the resistance side, Ali flagged the $70,180 to $71,340 range as a formidable barrier, reinforced by 533,300 addresses holding over 433,000 BTC. Overcoming this selling pressure is likely needed for Bitcoin to regain upside momentum. Some investors view Bitcoin as a potential inflation hedge, while others see the tighter monetary conditions as a headwind for speculative assets across the board. With the macroeconomic environment highly uncertain, Bitcoin may continue experiencing turbulent price action as its use cases and value proposition are put to the test.
