Is Bitcoin price going to crash again?
Bitcoin’s failure to hold $68,000 could be an early sign that a price reversal is beginning.
Bitcoin's recent struggles to maintain the $68,000 mark may indicate a potential price reversal on the horizon. The latest price recovery was sparked by a surge in inflows into spot Bitcoin exchange-traded funds (ETFs), exceeding $926 million over two days.
Profitability Among Holders
Currently, over 90% of Bitcoin holders are in profit. After Bitcoin broke above $67,000, the price rose past the short-term holders' realized price, allowing many traders to turn unrealized losses into gains. According to data from Cryptoverse, only 8.5% of Bitcoin investors were at a loss when the price hit $66,870 on October 16, meaning a remarkable 91.5% of the supply is now profitable.
The percentage of supply in profit versus loss is determined by analyzing unspent transaction outputs (UTXO), comparing the price at which they were last moved to the current market price. If Bitcoin continues its upward trajectory, even more investors will be in profit. However, a high percentage of profitable holders can signal an overheated market, often leading to price corrections.
Potential Pullbacks Ahead
Given the current on-chain dynamics, Bitcoin may face pullbacks in the coming days as investors look to lock in profits. A similar pattern was observed in September when Bitcoin futures open interest surged to $35.6 billion on September 26, only for the price to fail at the $66,000 resistance, resulting in an 11.5% correction over 12 days. Now, with the recent rally past $67,000, open interest has climbed by 20.6% since October 3, reaching an all-time high of $38.4 billion on October 16.
Additionally, Bitcoin CME futures open interest hit a record of 172,430 BTC, valued at approximately $11.53 billion. “The prevailing institutional bias is building long exposure,” commented K33 Research Senior Analyst Vetle Lunde regarding the surge in Bitcoin interest.
Technical Resistance at $68,000
From a technical standpoint, Bitcoin is currently encountering resistance at $68,000. The last rejection from this level on July 29 led to a sharp decline of 27%, dropping to $49,577. This suggests that bearish sentiment may again intensify around this price point.
For the bullish momentum to continue, Bitcoin must establish a decisive daily close above $68,000. If it fails to turn this level into support, we could see a correction that pulls the price back toward $61,000. CoinGlass data shows a significant buildup of sell orders above $68,000, underscoring the importance of this resistance level.
Whether the cryptocurrency can overcome the $68,000 hurdle will likely set the tone for the near-term future. Investors should stay vigilant, as both bullish and bearish scenarios could unfold based on how these dynamics play out in the days ahead.
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