After weeks of relative stability and testing the $30,000 level, Bitcoin has taken a bit of a plunge. Nothing too serious, though. In the past few days, it has dropped back to previous $27K levels due to network congestion stress. Analysts and experts are not too concerned. It’s normal occurrence after failed attempts to break the $30,000 mark several times. What happens from here? The news will not be what many want to hear.
If there’s a wild bearish breakout, Bitcoin could further hit $25,000. But, that’s all in the realm of distant possibilities. The potential decline will only be short term as the market prepares for the big bullish jump.
Decline Incoming?
For the past few days, the price has been bouncing between $28K and $30K all the time. That’s also evident on the 4-hour chart. Bitcoin is testing $28,000 at the moment, sitting around $27,500. If a rapid breakdown happens, it could spell a serious decline to $25,000 levels.
The RSI is nearing the oversold zone, and because of that, Bitcoin could push toward the $30K level. However, from a price point POV, it’s more likely that we’ll experience a bearish move. Experts agree that a drop to around $25,000 is very much possible. But, it’s not all bad.
On Sunday, the market has seen a major increase in Bitcoin transactions. In that way, mining fees have risen dramatically. This is a pattern we rarely see during bear markets – it’s more common during bull runs. The Taproot update which adds BRC-20 tokens and NFTs to the Bitcoin blockchain has also changed certain on-chain metrics and is associated with the increase in miner fees. This is a positive sign as it could mark the beginning of a bull market that will last for a longer period.
More good news – in the past few weeks, we’ve seen drops in price several times, but the market always responded well. That’s a good thing that shows the bull run is nearing as prices have solidified for weeks now. Whatever the trade market throws at Bitcoin, it manages to gobble up and get back to action shortly. This is why many aren’t concerned about a potential upcoming decline. Instead, everyone’s looking forward to the bull run we’ve yet to see.
Long-Term Holders Making Moves
Even with price drops, long-term Bitcoin holders are adding to their holdings. Many metrics including the Bitcoin Trend Indicator show an uptrend market despite the challenges. Since March 31, the long-term holders’ 30-day change has increased.
This metric is defined as coins that investors have been holding on to for more than 155 days. These investors are not likely to spend their old coins which leads to an increase in the dormant supply. A bullish sentiment forms because of this, and since there’s been a recent uptrend, it does support the belief that a bull market is coming.
Overall, the long-term news are positive even if the short-term news are not great. We’ll know more about what happens next the following week.