Bitcoin’s break in psychological resistance at 55,000 on Friday (October 8th) has led many investors to believe that Bitcoin will soon return to its previous ATH.
However, this is not yet possible. In the past 24 hours, Bitcoin hit an intraday high of $ 57,890 before falling back to $ 56,500 and trading at $ 57,456 at press time.
Bitcoin price chart | Source: Tradingview
Well, this isn’t a worrying sign as Bitcoin is still at a high price. However, if bullish momentum is to be maintained over the long term, the entire crypto market as a whole may lack the presence of another bullish catalyst.
Bitcoin needs support from private investors
Although Bitcoin is currently very close to ATH, on-chain data shows that retail investors are still showing no signs of FOMO. While these buyers do not create long-term market structure, they are important in creating rallies against key levels of resistance.
The number of addresses receiving Bitcoin is still well below the annual average. In addition, the number of transactions is below the 2020 average.
These records are obtained from successful on-chain transactions, with the number / addresses of the transactions currently at the same level as when Bitcoin was valued at $ 40,000.
When analyzing the net trading volume of exchanges, there appears to be a neutrality between inflows and outflows. This means that there is a lot of strong buying activity going on for Bitcoin.
It can be argued that long-term owners have driven the price above $ 42,000 in the past few weeks and eventually to $ 50,000. However, in order for Bitcoin to continue breaking resistance levels, FOMO is required from new retail investors.
Is Bitcoin facing another short-term correction?
More recently, Bitcoin appears to be pulling out of the strong supply zone it set up in May 2021.
Source: trade view
As can be seen from the graph, the highlighted red zone could be a strong sell zone for investors who bought prior to the May 2021 corrections and they could be looking for some drawing capital.
Once their contracts are closed they may try to get back into the market at a lower range and the market is likely to see another correction after rising 30% in October.
Overall, Bitcoin’s credentials remain strong and there is no imminent risk of invalidating immediate support. However, one more phase of the market will be essential if it is to surpass $ 64,000 in the next few weeks.
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According to AMBCcrypto