Bitcoin has recently grabbed headlines with its fluctuating price of around $28K. While Bitcoin’s price is trying to accelerate buyer confidence, sellers are increasingly active near resistance levels. Consequently, the psychological $30K threshold seems unlikely to be reached by Bitcoin next week. This sentiment is further supported by various on-chain metrics, particularly the rising NVT signal.
HODLers Get Low Confidence In Bitcoin
While Bitcoin initially upheld the ‘Uptober’ trend, it couldn’t sustain the momentum due to a profit-booking sentiment among long-term holders (LTH) or ‘Hodlers.’ Consequently, BTC’s price is indicating bearish on-chain metrics for the upcoming week.
Glassnode data highlights a significant rise in Bitcoin’s NVT signal (network value to transaction ratio), soaring to a high of 1,779 – a level not witnessed in the past five years. Even though Bitcoin’s current value is under half of its 2022 peak, the network volume has plummeted so drastically that a $28,000 valuation might be pushing the limits of sustainability.
A rise in Bitcoin’s NVT suggests that the network’s valuation is outpacing its transaction value. This can indicate either strong growth and investor enthusiasm or a precarious price bubble hovering around the brink of bursting.
Moreover, LTHs are taking profits after the BTC price surged above $28,000. The BTC Hodlers’ net position recently hit a 1-month low of 51,845. Historically, the Hodler Net Position Change has been a trustworthy gauge of Bitcoin market sentiment.
A decrease often signifies long-term holders are selling, potentially intensifying market selling pressure and triggering a downtrend. The departure of long-term holders could enhance volatility as short-term players gain dominance, triggering other investors to reconsider their market strategies. As a result, BTC’s price is now far behind, reaching the $30K mark next week.
Bitcoin’s Next Week Trend
Bitcoin is attempting to hold a trend above $28K, but a pronounced wick on the candlestick indicates strong selling by the bears at this high. Though bears attempted to capitalize on a recent decline, bulls defended the $27,000 level strongly. As of writing, BTC price is trading at $27,976, surging over 0.3% from yesterday’s rate.
The rising 20-day exponential moving average at $27.8K and a positive territory RSI above 60 suggest that the bulls are currently dominating. Buyers are likely to challenge the resistance at $28,500 once more.
Should they close above this, it will confirm a short-term double-bottom pattern with a target of $30K. However, it might not be within reach next week due to robust selling pressure and strong bearish metrics.
If the price retreats from this resistance and dips below the 20-day EMA, it might drop to $27,100. If the price fails to meet buyers’ demand near this level, then the BTC price might trigger a bearish consolidation of around $26,400.
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