Bitcoin's Next Target: $122K, But a Dip Could Come First
Bitcoin's Stance: Between $116K and $119K
Bitcoin (BTC) has been trading between $116,000 and $119,000 recently, showing neither significant gains nor losses. According to analysts, a decline might occur before Bitcoin can test the $122,000 mark, a critical level for determining a potential bullish phase.
The Importance of $122K for Bitcoin's Bull Run
According to the Long-Term Power Law chart, Bitcoin needs to breach the $122,000 resistance level to confirm a bullish market sentiment. This level indicates where long-term demand and supply zones exist. Failing to surpass it might lead to continued consolidation or a downward trend.
AMBCrypto’s analysis suggests that Bitcoin might decline in the short term before any upward movement.
Liquidity Outflows and Rising Profitability
Several on-chain metrics suggest a possible downward move. Spot market activity has consistently decreased, indicating reduced investor interest. Total spot buys have fallen from $658.76 million on July 7th to just $97.13 million.
This decline signals fading long-term interest despite Bitcoin holding above key bullish thresholds on the macro chart.
Simultaneously, the Net Unrealized Profit/Loss (NUPL) indicator has risen, reaching 0.57. This indicates growing unrealized profits, often preceding a sell-off.
A high NUPL increases the likelihood of a sell-off, potentially exerting downward pressure on Bitcoin and pushing it toward new short-term lows.
Potential Lows for Bitcoin
Analysis of the 24-hour Bitcoin Liquidation Heatmap indicates a likely decline toward the $116,000 region. Liquidity clusters near this level could attract the price downward but also act as demand zones, potentially reversing the price.
If a bounce occurs, Bitcoin might move toward upward liquidity zones extending to the $123,000 region.
In summary, a short-term decline might be necessary for Bitcoin to break through the $122,000 resistance. Success here could signal the start of a sustained bull run.
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