Currently, Bitcoin price maintains its position at $86,293 while staying above the $83,181 mark of its 200-day moving average.
The moving average functions as Bitcoin’s protective barrier because market sentiment remains positive when prices remain above this level.
But even with this bullish signal, some analysts maintain doubts about Bitcoin’s ability to continue its upward trajectory.
According to the former BitMEX CEO Hayes, BTC will experience a major price correction before reaching new peaks, which could push it down to approximately $70,000. Bitcoin reached its highest point at $110,000 before dropping by 36% to its current value.
According to Hayes, Bitcoin will experience a pullback to the $70,000–$75,000 range before making a significant upward movement that could reach $250,000 by the end of this year and potentially reach $1 Million in the long term.
Should Traders Brace for a Possible Dip?
Another useful tool traders watch closely is called the Mayer Multiple. The Mayer Multiple indicator reveals when Bitcoin prices become either excessively high or undervalued.
The current market data indicates Bitcoin has a robust support zone at $66,545. Bitcoin could establish a stable base if it experiences a price decline within this zone.
On the other hand, the “overheated” threshold of $199,636 has not been reached by BTC which indicates potential growth opportunities exist without immediate bubble risks.
Futures Market Sees Traders Pulling Back
Meanwhile, the futures market shows an intriguing development at this time. The futures market enables traders to bet on Bitcoin price movements, but recent months have witnessed a substantial trader withdrawal.
Bitcoin’s open interest, the total money traders have tied up in these bets, has decreased from $2.4 Billion to about $1.8 Billion. While Ethereum decreased by around $700 Million.
The substantial decrease in open positions indicates traders are withdrawing funds to reduce risk while taking profits from recent price increases.
While the reduction of open positions leads to decreased short-term market volatility, it also establishes conditions for market resets before major price movements occur.
However, the market space left by withdrawing traders seems poised for institutional investors to step in.
Texas passed the Bitcoin Reserve Bill (HB 4258) that enables state investment of up to $250 Million in Bitcoin. Texas municipalities have the authority to invest their own funds totaling $10 Million.
Such institutional moves hold significance because they demonstrate increasing institutional trust. The entry of big-money investors into the market might counteract trader caution, thus stabilizing Bitcoin prices in upcoming periods.
Bitcoin’s Price Levels Reveal Investor Behavior
Another way to understand the market mood is to look at where investors bought their Bitcoin. Currently, the majority of Bitcoin purchases occurred within the price range between $80,000 and $90,000.
This means many Bitcoin holders purchased their coins within the $80,000 to $90,000 price range, which provides support if market values decline.
However, the price activity between $90,000 and $69,000 remains minimal. The price area represents a vulnerable zone because Bitcoin has spent minimal time there, which means minimal investor commitment to hold during price drops.
A price drop below $80,000 could trigger a rapid market descent toward $69,000, looking for stronger support levels.
Right now, BTC faces a critical test. Will investors step in around $80,000 and create stability? Or will hesitation set off a deeper correction toward $70,000 or lower?
