Bitcoin is recovering but remains under immense liquidation pressure as of writing. While BTC faces headwinds, the area between $70,000 and $72,000 is proving to be a strong resistance level that must be breached for the wave of higher highs recorded in Q1 2024 to continue.
The world’s most valuable coin is trading below $70,000 at press time, rebounding from around $67,000. The main crucial support level to watch at press time is $66,000.
However, if the bears prove relentless and reverse the gains recorded earlier today, further losses could be on the horizon.
Will Bitcoin fall to realized price and STH support at $62,300?
Taking X, an analyst Remarks that if the ongoing liquidation of long positions continues, BTC could fall to the “short-term holder realized price” (STH realized price) of $62,300.
The trader considers this level to be an area of low long liquidity. As a result, this could be a limited support in which BTC bulls could find access to fill losses.
The realized price STH is generally used to gauge sentiment. Essentially, it represents the average purchase price of all BTC over a 155-day period. Those who choose to hold BTC during this period are often referred to as short-term holders or primarily speculators aiming to reduce price volatility.
While the STH realized price serves as a sentiment indicator, the drawn line can act as support. If BTC prices continue to plunge, trending below the STH realized price, it could force coin holders to liquidate as they are in the red.
On the other hand, if prices approach the STH realized price, traders might choose to buy, convincing holders that they are close to break-even.
The STH realized price is currently $62,300, but the one to three month realized price is $66,600.
Therefore, if Bitcoin loses $66,000, the liquidation could accelerate the fall towards the 155-day STH realized price.
Eyes on FOMC amid high inflation and strong US jobs data
As the crypto market remains tense, investors are closely watching the upcoming Federal Open Market Committee (FOMC) meeting. Given the good labor market conditions, the central bank is expected to leave interest rates unchanged at 5.50%.
Last week, jobs data beat expectations. According to the U.S. Bureau of Labor Statistics (BLS), 272,000 new jobs were created. created in June, far more than the 185,000 economists expected.
However, strong nonfarm payrolls (NFP) data dampened hopes of an imminent rate cut.
Despite this, with inflation down to 3.3% since the start of the year, according to the BLSthe chances of a rate cut are higher, which is a huge boost for Bitcoin bulls.
Featured image from Canva, chart from TradingView
