Key Takeaways
- Bitcoin’s RHODL Ratio has dropped, indicating long-term holders still dominate and have not reached the cycle top.
- Data shows strong support between $92,703 and $105,314, and relatively weak resistance above current prices.
- Several analysts expect higher prices, but mentioned that traders need to be cautious with the reasons revealed.
Bitcoin (BTC) price has kicked off the new month in consolidation. Since June 1, BTC has traded within a narrow range, between a swing low of $103,861 and a swing high of $105,820.
Despite its recent all-time high on May 22, there has only been a mild wave of profit-taking. Instead, the recent price action suggests that Bitcoin’s price may be entering the final stage of its current pullback.
In a market dominated by the flagship cryptocurrency, only a few catalysts can breach key resistance levels.
While a breakout may not be quick, current conditions suggest a significant correction might not occur in the short term. Here’s why.
Bitcoin Approaches Potential Reversal Point
To buttress this point, CCN examined the Realized HODL Ratio. Abbreviated as the RHODL Ratio, this metric measures the relative wealth distribution between short-term and long-term Bitcoin holders.
It compares explicitly the value of coins moved in the last week to those moved between one and two years ago.
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A rising RHODL Ratio suggests increasing activity from newer market participants. Most times, this indicates a local top.
On the other hand, a lower ratio may indicate that long-term holders are dominant, which tends to align with market bottoms or accumulation phases. According to Glassnode data, Bitcoin’s RHODL Ratio has recently dropped to 3,493.
This suggests that, despite the recent all-time high, Bitcoin’s price has not reached its cycle top yet. As a result, the current consolidation phase may be nearing its end.
Support Strong, but No Clear Breakout Still
We also analyzed the In/Out of the Money Around Price (IOMAP) in line with this thesis. The IOMAP helps identify key support and resistance levels by measuring the volume of coins held in unrealized profit or loss.
Typically, a high concentration of profitable addresses below the current price suggests strong support. However, a cluster of holders at a loss above it indicates potential resistance.
According to IntoTheBlock data, Bitcoin appears to have solid support between $92,703 and $105,314 — a range where a significant volume of BTC was accumulated.
In contrast, the volume of coins bought between $105,425 and $110,624 is relatively lower. This suggests that Bitcoin will unlikely encounter major selling pressure in the short term.
Therefore, if buying pressure increases, Bitcoin’s price could break through the $110,624 barrier and potentially chart a new all-time high.
However, analysts have cautioned that this bullish scenario hinges on key technical levels being breached. Prominent trader and MN Capital CEO Michaël van de Poppe recently shared his outlook on X, stating that BTC must break above the $106,000 level to trade higher.
If this breakout fails, van de Poppe warned that Bitcoin’s price could retrace and revisit the $101,000 support zone, which could be its final correction area.
“Bitcoin needs to break back above $106K and then we’re following the liquidity path. If weakness stays and we’ll start taking more liquidity, then we might be seeing <$101K as the final area of this correction,” The analyst wrote .
Like van de Poppe, CryptoQuant analyst Axel Adler Jr. also weighed in on Bitcoin’s outlook. According to Adler, the declining BTC reserves on centralized exchanges are a bullish signal, suggesting reduced sell pressure.
However, he cautioned that the current reserve levels are still high enough to offset a sustained uptrend. This means that unless a significant portion of BTC is moved off exchanges, the risk of short-term selling could remain.
“Since November 2024, CEX exchange reserves have decreased by 668,0000 BTC. This is a strong bullish signal, but it’s inaccurate to say that exchange reserves are exhausted. Currently, 2,432,989 BTC are available on exchanges,” Adler noted .
BTC Price Prediction: Short-Term Relief
From a technical perspective, the daily chart shows that Bitcoin’s price is trying to break the supply wall at $107,743. On two previous occasions before reaching its all-time high, BTC faced rejection at this level.
However, this time, the green line of the Supertrend is below the price. As the IOMAP indicated, this indicates strong support.
Besides that, the Money Flow Index (MFI) is rising again, indicating that market participants are buying the dip. If this continues, BTC might remain range-bound for a while.
However, if demand for the coin intensifies, it might surge past the overhead resistance. Once validated, Bitcoin’s next area of interest could be around $112,072.
On the contrary, if bulls fail to drive Bitcoin’s price past $107,743, this prediction might not come to pass.
In that scenario, the cryptocurrency might drop toward $92,219 at the 0.236 pullback region.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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