After a short-lived display of bullish momentum that saw the price rebound to around $116,000 after the tariff-induced sudden crash, Bitcoin’s price has maintained a sharp downtrend through the third week of October. Even more shocking, on-chain data has emerged that paints a pessimistic but uncertain picture of the cryptocurrency’s future.
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$100,000 is emerging as a key support zone
In a recent one X message On Friday, CryptoQuant analyst Julio Moreno shared insights from his technical analysis of Bitcoin price action. Moreno highlighted that Bitcoin’s most recent break below a price consolidation range of $120,000-$108,000 has led to a shift in focus to $100,000 as the next critical level.
The crypto analyst defended his report with the Bitcoin Trader On-chain Realized Price Bands metric, which measures the lower bound of the average on-chain acquisition cost for short-term Bitcoin holders. This measure simply helps identify the price level that would serve as support in cases where the price is undergoing corrective movements.
The chart shared above shows that $100.9k is currently the lower bound of the average price realized by traders, a price that Moreno expects could serve as a support zone.
In addition to technical analysis and on-chain activity, $100,000 is also a significant psychological price level, as it serves as the mark where Bitcoin enters a six-figure valuation. If the Bitcoin price were to fall to a level of $100,000, the strong psychological support from market participants could translate into the price action. As a result, the flagship cryptocurrency could see temporary relief from the bearish pressure it is currently under.
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What next for Bitcoin?
As mentioned earlier, $100,000 represents a significant level for the Bitcoin price, with psychology and technical analysis coming together to reinforce its importance.
From Moreno’s post, a conjecture can be drawn that if the $100,000 support were to hold, Bitcoin’s bullish sentiment among market participants could be renewed, setting the pace for the flagship cryptocurrency’s recovery towards its current all-time high price.
On the other hand, the failure of this important price level could have serious consequences, especially for short-term holders. A break in this psychological support could cause a sharp sentiment shift among Bitcoin market participants, causing them to sell their holdings to minimize losses or escape with some profit.
Interestingly, the 365-day moving average (MA) is around $100,000 psychological support. For context, the 365-day MA is a technical indicator that shows the average closing price of Bitcoin over the past year. In line with its primary function, the indicator is used to measure Bitcoin’s long-term direction.
Therefore, if Bitcoin were to fall below its 365-day MA of $100,000, it could be a sign that the digital asset is about to embark on a prolonged bearish trajectory, a sign that could precede major price corrections. At the time of writing, Bitcoin is worth approximately $107,400, which represents a loss of more than 5% of its value in seven days.
Featured image from Flickr, chart from Tradingview