simply put
On July 14, the Bitcoin (BTC) price hit a new 2023 high of $31,500 before a wave of profit-taking triggered a retracement below $30,000.
Relative Strength Index (RSI) data suggests that Bitcoin (BTC) has now broken out of oversold territory.
On-chain data shows that long-term investors are holding on firmly amid unprecedented interest from institutional investors.
On July 14, the Bitcoin (BTC) price hit a new 2023 high of $31,200. However, a wave of profit-taking has again triggered a retracement below $30,000. As Bitcoin is now oversold, how high can it rally during the next Bitcoin price rally?
Despite volatile price action in recent weeks, long-term investors continue to double down on their bullish Bitcoin positions. What are the chances that BTC will hit $35,000 during the next rally?
Bitcoin is approaching oversold territory
According to the Relative Strength Index data, the Bitcoin price correction may soon stop. After more than a week of sideways price fluctuations, Bitcoin is approaching the oversold region. As shown in the figure below, the Bitcoin daily RSI is currently 41. This means that it is now closer to the oversold mark of 30 than the overbought area of 70.
The relative strength index assesses the strength and momentum of a price trend. When the RSI fluctuates closer to 30 than 70, it indicates that the underlying asset may soon become oversold and result in a sharp price rally.
Therefore, strategic investors may interpret this as a signal to buy a bullish position in Bitcoin before the next price rally.
Long-term Bitcoin holders maintain bullish stance ahead of next rally
On-chain data from Santiment confirms this bullish prediction, with long-term BTC investors holding on despite the recent price correction.
As shown in the figure below, the average BTC coin age data has continued to rise over the past two weeks. Specifically, from July 8 to July 24, it increased from 2,631.06 to 2,685.02, an increase of 2%.
Average Coin Age evaluates the change in the average period that investors hold their tokens. It is calculated by dividing the number of days each token has spent in its current wallet address by the total number of tokens in circulation.
The steady rise in the average Bitcoin coin age suggests that long-term investors remain bullish ahead of the next price rally.
Considering the gradual progress made by various institutional firms in applying for spot Bitcoin ETF approval, the increase in average coin age could be an early sign of strong momentum driving BTC above the $35,000 resistance level.
BTC Price Prediction: $28,000 support to the rescue
The above factors suggest that BTC may find support around $28,000. In this area, 720,000 investors bought 573,440 BTC at an average price of $28,500.
In an effort to cover their long positions, they could accumulate more Bitcoin and inadvertently trigger a price rally.
Although unlikely, if this support fails, Bitcoin could retrace to $27,500.
On the contrary, if the bullish predictions come true, Bitcoin could hit $33,000 during the next price rally. However, 2.66 million holders bought 1.02 million Bitcoins at an average price of $30,300. If they were looking to take profits, it could significantly slow down the rally.
Nonetheless, if the bullish momentum grows as expected, BTC could rise to $33,000.