Bitcoin has been making headlines recently for its volatile price around $28,000. While Bitcoin’s price attempts to gain buyer confidence, sellers are becoming increasingly active near resistance levels. As a result, it seems unlikely that Bitcoin will be able to reach the psychological threshold of $30,000 next week. This sentiment is further supported by various on-chain indicators, particularly the rising NVT signal.
Holders lack confidence in Bitcoin
While Bitcoin initially maintained the “Uptober” trend, it could not sustain the momentum due to profit booking sentiment among long-term holders (LTH) or “Hodlers.” As a result, Bitcoin’s price indicated bearish on-chain indicators for the week ahead.
Glassnode data highlights a significant rise in Bitcoin’s NVT signal (network value to transaction ratio), surging to a high of 1,779, a level not seen in the past five years. While Bitcoin is currently worth less than half of its 2022 peak, network transaction volume has fallen significantly and a $28,000 valuation could push the limits of sustainability.
The rise in Bitcoin NVT suggests that the network’s valuation is outpacing its transaction value. This could indicate strong growth and investor enthusiasm, or it could indicate a price bubble teetering on the brink of bursting.
Additionally, LTH is taking profits after BTC price surged above $28,000. BTC holders’ net position recently hit a 1-month low of 51,845. Historically, Hodler net position changes have been a reliable indicator of Bitcoin market sentiment.
A decline generally means that long-term holders are selling, potentially exacerbating market selling pressure and triggering a downtrend. With short-term investors taking over, the departure of long-term holders could increase volatility, prompting other investors to reconsider their market strategies. As a result, BTC’s price is now far behind and will hit the $30,000 mark next week.
Bitcoin trend next week
Bitcoin is trying to maintain the trend above $28,000, but the clear wicks on the candlesticks indicate strong selling by the bears at this high. Although the bears are trying to take advantage of the recent dip, the bulls are strongly defending the $27,000 level. As of the time of writing, BTC price is trading at $27,976, up more than 0.3% from yesterday.
The rising 20-day exponential moving average at $278,000 and the RSI above 60 suggest that bulls are currently in command. Buyers are likely to challenge the $28,500 resistance again.
A close above this level would confirm a short-term double bottom pattern with a target of $30,000. However, this might not be achieved next week due to strong selling pressure and strong bearish indicators.
If the price turns down from this resistance and breaks below the 20-day EMA, a drop to $27,100 is possible. If the price fails to meet buyers around this level, the BTC price could trigger a bearish consolidation around $26,400.