Bitcoin has been experiencing some volatility in recent weeks, with the price dropping by more than 3.27% since the beginning of April. However, there are early signs of a recovery as the price slowly climbs back towards the crucial $80,000 level. On-chain data is showing signs of panic selling from short-term holders, which some analysts believe could present a long-term buying opportunity.
The BTC Short-Term Holders SOPR (Spent Output Profit Ratio) indicator is currently trending downward, indicating that many short-term Bitcoin holders, who have owned their coins for less than 155 days, are selling at a loss. A SOPR value below 1 suggests that coins are being sold for less than what they were bought for, a sign of fear or panic in the market.
Analysts are drawing parallels between the current price drop in Bitcoin and earlier dips, such as the fall to $60,000 in 2024 and the dip to $26,000 in 2023. They believe that historical patterns show market pullbacks are often followed by strong recoveries and new highs.
In terms of price action, Bitcoin has gained nearly 1.82% since yesterday, with the current price hovering around $79,839, just below the important $80,000 level. According to a German analyst known as cb, Bitcoin needs to break above $83,739 and $84,689 to continue moving higher, with these levels seen as key resistance points.
On April 6, Bitcoin experienced a sharp drop to a low of $77,212, driven by market volatility. If the price falls below the $75,762 to $74,458 range, it could lead to further losses, according to cb. Despite some downward pressure in the market, the recent bounce has given traders reason to be optimistic. Many see this dip as a healthy correction and a potential setup for Bitcoin’s next upward movement.
Overall, while there are still bearish sentiments in the market, the recent price action and on-chain data are pointing towards a possible recovery. Traders and investors are advised to stay informed and monitor key support and resistance levels to make informed decisions in the ever-changing cryptocurrency market.