Bitcoin’s price remains volatile amid market turbulence and macroeconomic challenges, a new analysis from the on-chain analytics firm Glassnode has drawn attention to the $88,000 price level as a crucial support point. Investors should closely monitor this threshold, as it could provide key insights into Bitcoin’s future price movements.
Bitcoin had an impressive surge in early December 2024, reaching near $108,000. However, following this peak, the asset has struggled to maintain its momentum, with its price recently dropping almost 11%. Bitcoin saw a dip from approximately $102,700 to as low as $91,200 before making a slight rebound, trading around $95,000 at press time.
Despite the drop, many believe Bitcoin’s bullish trend is far from over. However, Glassnode’s analysis suggests that investors should pay attention to the $88,000 level as a crucial price point that could signal the next big move in Bitcoin’s price action.
Glassnode emphasizes the importance of the $88,000 price point, as it corresponds to the cost basis of short-term holders of Bitcoin. The cost basis, or realized price, refers to the price at which assets were last transacted. Short-term holders tend to sell their assets when the price approaches this level, as they seek to lock in profits.
As Bitcoin nears $88,000, Glassnode suggests there is a risk that a large volume of short-term holders could exit their positions. This selling pressure could lead to a significant price decline, as Bitcoin may not have sufficient support immediately beneath this level. According to Glassnode’s findings, the next major support zone is likely to be around $73,000, based on the transaction volumes at that price point.
The UTXO Realized Price Distribution is an on-chain metric that shows where Bitcoin was last moved and at what price. This tool has helped Glassnode pinpoint areas of potential price pressure. In their analysis, Glassnode identified the $88,000 level as critical because it is where many short-term holders bought into the market. As a result, there is a higher likelihood of selling activity if Bitcoin reaches this price, potentially leading to a sharp correction.
The firm also pointed out that Bitcoin’s price could find strong support around $73,000 if the $88,000 level is breached. This support level comes from the volume of Bitcoin last moved at this price point.
Supporting Glassnode’s view, popular crypto analyst Ali Martinez also identified the $88,000 level as a key price point, calling it “free fall territory” for Bitcoin. If Bitcoin falls below this threshold, it could trigger a swift downward movement, driving the price closer to the $73,000 support level.
Veteran trader Peter Brandt also shared concerns about the potential for a deeper correction. He noted that Bitcoin may need to correct further, potentially falling below $89,000, before resuming its upward momentum. Brandt pointed out that a head-and-shoulders pattern could be forming on the daily chart, which suggests a possible decline toward the $73,000 level.
The volatility surrounding Bitcoin could intensify in the near future due to upcoming U.S. economic data, such as the Non-Farm Employment Change and the Unemployment Rate, which are set to be released on January 10, 2025. Depending on how these figures compare to expectations, Bitcoin could experience further price swings. Strong or weak data could affect the Federal Reserve’s approach to interest rates, potentially impacting investor sentiment across various markets, including cryptocurrency.
Bitcoin’s future price movement appears to hinge on its ability to hold above the crucial $88,000 level. If Bitcoin fails to maintain this support, it could face a decline toward the $73,000 mark. However, given the current market environment and the ongoing macroeconomic uncertainty, it’s essential for investors to remain vigilant and monitor upcoming economic data. Whether Bitcoin maintains its bullish momentum or experiences further corrections will depend largely on how it handles these critical price levels in the coming days.
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