Bitcoin price shows a lack of momentum after an explosive move in the last three weeks. The fourth week has been relatively silent, without a lot of volatile moves. While BTC consolidates, other altcoins are rallying left and right, providing massive gains.

This rally has pushed BTC to produce a higher high above the November 5 swing high at roughly $21,400, However, the last significant high that resulted in a lower low was $25,205, formed on August 14. Therefore, a higher high above this level will provide further confirmation of the start of a new uptrend.

Until then, there is a good chance Bitcoin price might pull back to critical support levels, but if the sellers band together, this move could transform into a sell-off. Identifying the crucial bouncing platforms is crucial.

The three-day chart shows that the immediate support level is the $21,481 barrier, beyond which is the 2023 Point of Control (POC), which is the highest volume traded in 2023. If these levels fail to hold, then buyers are likely to step in at the 2022 POC at $19,250.

Adding credence to this pullback thesis is the 30-day Market Value to Realized Value (MVRV) for Bitcoin price.  This index is used to determined the average profit and loss of investors. Currently, the MVRV hovers around 16%, which is the average profit of addresses that purchased BTC in the last month.

Historical data shows that when the 30-day MVRV is in the 12% to 21% zone Bitcoin price has formed a local top. Therefore, market participants need to be cautious as these in-the-money investors could sell their holdings to realize profits, triggering a pullback.

A retracement to $19,250 or any support levels above it will be a good place to accumulate. The bounce from these barriers could trigger a spike in buying pressure that propels Bitcoin price to to tag the next crucial zone, extending from $28,000 to $30,000.

Beyond these levels, $31,840 is a key level as it is the midpoint of the 67% crash between March and November 2022.

BITCOIN Bullish After a Pullback

Jan 27 2023

Pending

Published 63d ago

28392.60

Current price

19511.75

Entry price