Bitcoin (BTC) price reached a new 2023 high of $31,200 on July 14. However, the wave of profit-taking triggered another bounce below $30,000. With Bitcoin now oversold, how high can it bounce during the next Bitcoin price rally?
Despite the volatile price action in recent weeks, long-term investors have continued to compound their bullish positions in Bitcoin. What are the odds of BTC reaching $35,000 during the next rally?
Bitcoin is approaching the oversold zone
According to the relative strength index Data, bitcoin price rebound may stop soon. After more than a week of sideways price action, Bitcoin is approaching the oversold zone. As seen below, the daily RSI for Bitcoin is currently at 41. This means that it is now closer to the oversold mark of 30 than the overbought area of 70.
the relative strength index It assesses the strength and momentum of the price trend. When the RSI swings near 30 from 70, it indicates that the underlying asset may soon become oversold and is due for a significant price recovery.
Thus, strategic investors may interpret this as a signal to take bullish positions on BTC before the next price rally.
Bitcoin long-term holders maintain a bullish stance ahead of the next rally
To confirm this upward projection, Emotion“s The on-chain data reveals that the long-term BTC investor is HODLing despite the recent price correction.
As shown below, the BTC Mean Coin data has continued its bullish trend over the past two weeks. Specifically, between July 8th and July 24th, it grew by 2% from 2631.06 to 2685.02.
The average age of the coin It evaluates changes in the average length of time that investors hold their tokens. It is derived by dividing the number of days each coin has spent in its current wallet addresses by the total number of coins in circulation.
This steady rise in Bitcoin The average age of the coin It indicates that long-term investors have maintained a bullish stance before the next price hike.
Given the incremental progress made by the many institutional firms that have applied for Spot Bitcoin ETF approval, the The average age of the coin The growth could be an early sign of stronger momentum to push BTC above the $35,000 resistance.
BTC Price Prediction: The $28,000 Support Level to the Rescue
The above factors suggest that Bitcoin is likely to find support around the $28,000 level. In that region, 720,000 investors bought 573,440 BTC at an average price of $28,500.
To cover their long positions, they can accumulate more bitcoins and inadvertently cause a price rebound.
Although unlikely, BTC could drop towards $27,500 if this support level gives way.
Conversely, Bitcoin could reach $33,000 during the next price rally if the bullish prediction is fulfilled. However, 2.66 million holders bought 1.02 million bitcoins at an average price of $30,300. If they are looking to book profits, that could slow the rally significantly.
However, bitcoin is likely to head towards $33,000 if the bullish momentum grows as expected.
Disclaimer
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.
