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Bitcoin extended his correction below the psychological level of $100,000 in the last 24 hours. At the time of writing, Bitcoin is struggling to stay above the $94,000 mark after briefly recovering from the recent crash to $91,000.
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As it stands, Bitcoin’s price outlook has taken a cautious turn, with crypto analyst Ali Martinez highlighting a $12,000 void between $87,000 and $75,000. The analysiswhich is based on the Bitcoin UTXO Realized Price Distribution (URPD) ATH-Partitioned, reveals a lack of significant support in this range and raises concerns of a quick crash towards $75,000.
$12,000 void shows lack of support between $87,000 and $75,000
Data from Bitcoin’s UTXO Realized Price Distribution (URPD) ATH-Partitioned metric shows that there is no substantial realized price activity in the range between $87,000 and $75,000. The UTXO is a relatively quiet but important technical indicator that provides insight into the distribution of Bitcoin across different price levels and focuses on UTXOs (Unspent Transaction Outputs).
Therefore, analyzing UTXOs helps identify the price levels at which Bitcoin holders are currently sitting on realized gains or losses.
As noted by Ali Martinez, the range between $87,000 and $75,000 opens a $12,000 gap that could easily turn negative for Bitcoin. This is because this range represents “little to no support,” meaning there is insufficient historical buying activity to stabilize Bitcoin’s price as it enters this zone. As such, this void becomes larger the risk of a sharp correction should Bitcoin fall below the upper limit.
Market Implications of the $12,000 Void
As it stands now, the $12,000 threat could only be valid if Bitcoin were to break below $87,000. While Bitcoin has largely held above $90,000 even during corrections since November, the recent drop to $91,000 opens up the possibility of an eventual drop below $90,000. This concern is reinforced as the Crypto Fear and Greed Index shifts to a neutral zone, accompanied by an increase bearish sentiment on social media.
If Bitcoin were to break below $90,000, it could open the possibility of a further decline towards $87,000. This in turn would most likely lead to a rapid drop to $75,000. This scenario would undoubtedly test investors’ bullish sentiment and Bitcoin’s ability to hold up predictions of a long-term bullish trajectory.
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On the other hand, you could easily argue that the continued consolidation provides the opportunity to accumulate more BTC. According to According to a CryptoQuant analyst, the short-term SOPR indicator is currently below 1, which means many short-term investors are selling Bitcoin at a loss. However, history shows that this phenomenon often precedes a major upward trend a good time for accumulation.
At the time of writing, Bitcoin is trading at $94,350.
Featured image from Getty Images, chart from TradingView