Bitcoin (BTC) Price at Crossroads —$100k Breakout or $50k Reversal? 

FXEmpire.com -

Bitcoin (BTC) price peaked at $64,000 on February 28, 2024, before pulling pack towards $61,000 over the next 48 hours. Market trends provide fresh insights into the prospects of BTC price reaching $100,000 before the upcoming halving event.

Vital on-chain data reveals that the retracement may have been triggered by long-term investors looking to diversify and reinvest profits in the altcoin markets. 

What are the chances of a Bitcoin price witnessing a breakout above $70,000 in March 2024?

Long-term Investors Now Reinvesting Profits in Altcoins

After a blistering close to February 2024 that saw Bitcoin price come within $5,000 of reaching a new all-time high investors are now looking towards the altcoin markets.

As a rule of thumb, strategic investors often consider a market saturated when an asset edges closer to its all-time high price. 

This phenomenon reared its head in the Bitcoin markets this week. BTC price soared to a 3-year peak of $64,000 on February 28, bringing it within 7.2% of reclaiming its previous all-time high of $69,000 recorded in November 2021. 

Barely 48 hours after achieving that feat, Bitcoin long-term investors carried out their largest profit-taking wave in over 45-days. 

Santiment’s Age Consumed metric, tracks real-time swings in long-term investors trading activity, by multiplying the number of recently-traded coins  by the number of days since they had last moved. 

Rising values of the Age Consumed metric implies that more long-held coins are currently being traded and vice-versa. 

Bitcoin (BTC) Age Consumed vs. Price | Source: Santiment

The chart above depicts that BTC Age Consumed recorded its upswing on Feb 29, right after prices hit $64,000. This move that unsurprisingly tipped the momentum in the bears’ favor momentarily as prices dipped 

In specific terms, Bitcoin saw 78.4 million coin days consumed on Feb 29. And within 48 hours, BTC price took a tumble from 5% tumble from $64,000 to $60,644  

Notably, this was the highest value of coin days destroyed, since the post-ETF sell-the-news wave around Jan 15, when BTC Age Consumed rose to 104.3 million. 

This signals that after 51% gains in February, BTC long-term holders are now making strategic moves to book some profits and diversify their portfolio.  

BTC Dominance Has Trended Downwards Since Feb 28

In further confirmation of this stance, market data trends shows that since the major sell-off recorded among BTC long-term holders on Feb 29, Bitcoin share of the crypto market has been in decline. 

TradingViews’ Bitcoin Dominance chart (BTC.D), shows the value of Bitcoin’s market capitalization in comparison to the rest of the crypto market. Since hitting $64,000 on Feb 28, BTC.D has declined by 2% to hit a weekly low of 53.5% on March 2, as depicted in the chart below. 

Bitcoin Dominance (BTC.D) Source: TradingView

This decline in Bitcoin dominance suggests that investors have started to rotate their profits into altcoins with high-growth prospects.

When long-term investors display higher risk appetite and increased flow of capital towards altcoin, the BTC price rally is likely to slow down considerably, in the coming weeks.

In essence, while the market remains bullish, the decline in Bitcoin dominance suggests another 51% rally above $100,000 in March 2024 may be unlikely. 

Bitcoin Price Forecast: $70k breakout only a matter of time 

Bitcoin price soared 51% in February 2024. But with investors displaying higher confidence in the broader crypto market, the BTC price rally could slow down in March 2024. 

However, in terms of short-term price action, the upper Bollinger band technical indicator shows that sell-wall at the $62,500 area is the major resistance to the bull rally. 

Bitcoin (BTC) Price Forecast, Feb 2024 | Source: TradingView

A decisive weekend breakout above that key $63,000 resistance could propel BTC closer to the $70,000 in the coming week. 

On the downside, with the Bitcoin ETFs closed for trading, BTC will likely attract less demand this weekend. If the bear capitalizes on this, BTC price could reverse below $60,000. 

 

This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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