Recently, Bitcoin has been making headlines for its price fluctuations around $28,000. While Bitcoin price attempts to strengthen buyer confidence, sellers are becoming increasingly active near the resistance level. Therefore, it seems unlikely that Bitcoin will reach the psychological barrier of $30,000 next week. This sentiment is further supported by various on-chain indicators, especially the continued rise of the NVT signal.
Bitcoin holders lack confidence
Although Bitcoin initially maintained the “Uptober” trend, this could not be sustained as long-term holders (LTH) or “Hodlers” began to book profits. As a result, Bitcoin’s price indicated bearish on-chain indicators for the week ahead.
Glassnode data shows that Bitcoin’s NVT signal (network value to transactions ratio) increased significantly, surging to a high of 1,779, a level not seen in the past five years. Although Bitcoin is currently worth less than half of its 2022 peak, network transaction volume has dropped significantly and the $28,000 valuation may exceed the limits of sustainability. The rise in Bitcoin NVT indicates that the network’s valuation is exceeding its transaction value. This could be a sign of strong growth and investor enthusiasm, or it could be a sign that a price bubble may be about to burst.
Additionally, long-term holders (LTH) are taking profits after the price of Bitcoin surged above $28,000. The net position of Bitcoin holders recently hit a one-month low of 51,845. Historically, changes in the net position of Hodler have been a reliable indicator of Bitcoin market sentiment. A decline in net positions usually means that long-term holders are selling, which may increase market selling pressure and trigger a downtrend. With short-term investors dominating, the withdrawal of long-term holders may increase volatility, prompting other investors to reconsider their market strategies. Therefore, at present, the price of Bitcoin is far behind and may not reach the $30,000 mark next week.
Bitcoin's trend next week
Bitcoin is currently struggling to sustain above $28,000, but the candlestick chart shows that bears are selling strongly at this high. Although bears are trying to take advantage of the recent dip, bulls are strongly defending the $27,000 level. As of writing, the price of Bitcoin is trading at $27,976, up more than 0.3% from yesterday. The rising 20-day exponential moving average at $27,800 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 target may be difficult to achieve next week due to intense selling pressure and strength in 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 the buyers’ demand around this level, the bitcoin price could decline further and touch the bearish zone around $26,400.