Bitcoin Leads Market Pullback Above $26,000 – Here’s How BTC Price Could Play In The Coming Week
In a world where economic uncertainty is rife, Bitcoin has once again proven its resilience, sparking discussions about the goals of a bullish rally. This week, the BTC price surged past the $28K milestone, bolstered by a positive Consumer Price Index (CPI) report that hinted at a recovering economy. However, the rally was short-lived and within hours Bitcoin had dipped below the $26K mark. Still, as the dust settles, Bitcoin is surging once again, gaining traction amid economic chaos, leaving traders eagerly anticipating a potential bullish comeback next week.
Bitcoin faces pressure from sellers
The current downward rally in the BTC price chart has proven to be profitable enough for short-term sellers as Bitcoin shows extreme volatility. Glassnode’s data reveals that the majority of short-term Bitcoin holders started making money when the Bitcoin price eclipsed $25,200.
This suggests that many short-term holders were already in a profitable position, potentially encouraging them to liquidate their Bitcoin holdings, possibly resulting in a price decline. The Spent Output Profit Ratio (SOPR), which indicates that many Bitcoin addresses sold at a loss, fell below 1.
A SOPR value less than 1 means that more coins are being sold at a loss than at a profit. This may indicate a potential market bottom, as it implies that most sellers who invested near peak prices have now sold out. Still, the selling pressure experienced by short-term holders was not mirrored by those who had held Bitcoin for longer periods. According to data from Santiment, the market value to realized value (MVRV) ratio has seen a significant decline in recent weeks.
This suggested that Bitcoin was no longer overvalued and that long-term holders lacked a strong motive to sell their Bitcoin holdings.
What to expect from the BTC price next week?
On the 4-hour price chart, Bitcoin is showing bullish support as the price has recovered from $26K. BTC’s price is currently trying to break above the EMA20 resistance level, which could propel the price further to a new resistance level.
At the time of writing, the Bitcoin price is hovering around $26,863, having increased by over 0.8% in the last 24 hours. The asset continues to hover within a range-bound zone of $26.5K-$27K. However, bulls may gain confidence if the BTC price rises above $26.9K as the asset could witness a peak in long positions near this level.
It is expected that bears may try to lower the price to $26.5K again in the next 2-3 days; However, there is a rebound on the horizon next week as bulls are on course to send the price above the EMA50 at $27.5K.
