Is The Bitcoin Price Correction Over? Here’s The Support Level To Watch
June 29 2024 - 3:00AM
NEWSBTC
The Bitcoin price suffered significant bearish pressure over the
past week, dragging down alongside it a large portion of the
general crypto market. The premier cryptocurrency tumbled as low as
$59,500 at some point in the week — its lowest in nearly two
months. While investors will be hoping that the worst is over, it
is difficult to determine whether BTC is ready to resume its
bullish run. In any case, a prominent crypto intelligence firm has
identified a price level critical to the future trajectory of the
Bitcoin price. $56,000 The Ultimate Support Level For Bitcoin:
CryptoQuant In a recent report, the blockchain analytics platform
CryptoQuant put forward an interesting prognosis for the price of
Bitcoin over the coming days. According to the firm, the $56,000
price level is an important level to the future performance of the
premier cryptocurrency. Related Reading: Ethereum’s Breakout
Moment: Is a $7,500 Target Achievable? Experts Weigh In The
relevant indicator here is Metcalfe price valuation bands, which
pinpointed resistance levels and tops in the previous cycle.
However, as shown in the chart below, these bands (the red line)
acted as a critical support area in May. For context, the Metcalfe
Law states that the value of a network is proportional to the
square of the number of its users. Basically, this law suggests
that the value of the cryptocurrency (Bitcoin) is intrinsically
linked to the size and activity of its network. The Metcalfe
price valuation bands are derived from this principle, providing a
valuation framework associated with the network effect. These bands
create a range of price levels that evaluate where Bitcoin should
theoretically trade based on the network fundamentals.
Historically, these bands have acted as both reliable resistance
and support levels in different market cycles. In recent months,
the $56,000 level has been a pivot point for the indicator,
providing a strong support for the Bitcoin price in May. According
to CryptoQuant’s report, the price level might prove to be vital
should the premier cryptocurrency face additional downward
pressure. However, if the Bitcoin price dips below this level, the
market leader could experience a major correction. Bitcoin Price At
A Glance As of this writing, the Bitcoin price has returned to
around the $60,700 mark, reflecting a 2% decline in the last 24
hours. The coin’s performance on the weekly timeframe is deeper in
the red. According to data from CoinGecko, BTC is down by more than
6% in the past week. Nevertheless, the cryptocurrency ranks as the
largest asset in the sector, with a market capitalization of over
$1.18 trillion. Related Reading: Steam’s Clicker Game Sensation
Opens Debate About NFTs And Crypto Gaming Featured image from
iStock, chart from TradingView
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