Despite numerous forecasts that the price of Bitcoin (BTC) could rise to $120,000 before the end of the year, the coin has suffered a setback and is now trading below $97,000. However, historical data indicates that such pullbacks often present an opportunity for new Bitcoin buyers to accumulate.
If this pattern holds, Bitcoin price could close the year on a higher note. This chain analysis reveals how this scenario could play out.
Bitcoin presents a rare opportunity again
The price of Bitcoin has fallen 12% over the past seven days, likely due to increased selling pressure as the holiday season progresses.
This pressure is reflected in the sharp drop in the Coinbase Premium index, which measures buying and selling activity in the United States. A rising index indicates strong buying pressure, while a falling index indicates increasing sales.
Currently, the index points to significant selling pressure. However, in previous cycles, intensifying sales often attracted new buyers eager to purchase Bitcoin at a discount. If this pattern repeats, BTC could see renewed accumulation and potentially rise higher.
Coinbase Bitcoin Premium Index. Source: CryptoQuant
Interestingly, crypto analyst MAC_D also agrees with this sentiment and notes that the cryptocurrency could soon experience a rebound.
“Historically, this phenomenon has been temporary during bull markets, often attracting new buyers who saw it as an opportunity. While it is unclear if the price after this sharp drop represents the bottom, if the bull market continues, a bottom may soon form, which could lead to a rebound.” MAC_D noted on CryptoQuant.
Furthermore, the profit-taking rate among Bitcoin holders also supports this view. On December 16, the volume of on-chain transactions with profits exceeded 250,000 BTC.
At the time of writing, the value has decreased to 58.1000, indicating that the drop in Bitcoin price has forced investors to continue HODLing instead of liquidating their assets. If this value continues to decline, a BTC bounce is likely.
Bitcoin daily on-chain trading volume with profits. Source: Sentiment
BTC Price Prediction: Soon to Break Above $100,000 Again
According to the 4-hour chart, Bitcoin has found support at $92,888. As a result, the price has found another stronger support at $95,871. However, the Awesome Oscillator (AO) has remained negative, suggesting bearish momentum.
However, with the appearance of green histogram bars, BTC could evade another notable drop and trade higher. If that is the case, the price of Bitcoin could reach $104,299 in the short term. In a highly bullish market condition, the value could rise to $108,386.
4 hour Bitcoin analysis. Source: TradingView
On the other hand, a drop below the aforementioned support level could invalidate this prediction. If that were to happen, the price of Bitcoin could fall to $92,144.
