A well-known crypto analyst is sounding the alarm, indicating that Bitcoin may face a sudden collapse if it fails to maintain a crucial support level. Ali Martinez, a crypto trader with a significant following on X, has warned his audience that Bitcoin could drop by almost 27% if it dips below $93,806.
Martinez relies on the Unspent Transaction Output (UTXO) Realized Price Distribution (URPD) model to identify these critical support levels. UTXO monitors the number of existing coins that have recently moved within specific price ranges. According to Martinez, a potential correction to $70,000 is possible if Bitcoin falls below $93,806, as there is minimal support until it reaches $70,085.
The analyst also notes that some investors are taking preemptive measures in anticipation of a bearish trend by transferring their Bitcoin to exchanges, possibly preparing to sell. In the past week alone, over 33,000 Bitcoin worth more than $3.23 billion have been sent to exchanges by these savvy investors.
Moreover, Martinez observes that there has been a significant increase in Bitcoin profits being realized, with over $7.17 billion in profits being cashed out on December 23rd. This suggests that some investors are already selling off their holdings in preparation for a potential market downturn.
Martinez points out that bearish sentiment is reflected in the decreasing number of traders betting on Bitcoin’s upward movement on major exchanges like Binance. The percentage of traders with open long positions on Bitcoin has dropped from 66.73% to 53.60%, indicating a shift towards a more bearish outlook.
To reverse this bearish trend, Martinez suggests that Bitcoin needs to reclaim $100,000 as a solid support level on the daily chart based on the In/Out of the Money Around Price (IOMAP) metric. This metric categorizes crypto addresses based on whether they are profiting, breaking even, or losing money to determine support and resistance levels.
If Bitcoin can successfully close above $100,000, Martinez believes that a renewed rally could propel the cryptocurrency to $168,500, based on the Mayer Multiple indicator. This oscillator analyzes various ratios between price and the 200-day moving average to predict potential price movements.
At the time of writing, Bitcoin is trading at $95,855, down 2.3% in the last 24 hours. It remains to be seen whether the cryptocurrency will be able to maintain its current levels or if it will experience the predicted correction. Stay informed by subscribing to receive email alerts and following updates on platforms like X, Facebook, and Telegram.
Remember, this article is for informational purposes only and should not be considered as financial advice. Always conduct thorough research and consult with a professional before making any investment decisions.