Bitcoin ends September with a double-digit loss from August. As market sentiment continues to deteriorate, the major cryptocurrency must hold onto a vital support level to avoid a major correction.
Bitcoin in danger
Bitcoin is consolidating around the $19,000 support level as market participants took note of its price weakness. Market sentiment towards bitcoin remains negative. Santiment’s social data shows a weighted sentiment score of -0.69, while Bitcoin social media discussions are below 20%, indicating declining interest.
Brian Quinlivan, chief marketing officer at Santiment, noted this trend in a September 30 summary report, noting that “the world remains very fragile, and traders don’t trust the upside of anything anytime soon.“Bitcoin has suffered alongside other risky assets throughout this year, amid rising inflation, rising interest rates, the global energy crisis and market exhaustion in the global market. wake of the 2021 bull market.
The decline in interest in bitcoin can also be observed from an on-chain perspective. According to Glassnode, the number of addresses holding at least 1,000 BTC has remained stable at around 2,117 addresses over the past three days, after a sharp drop of 26.75%. This market behavior suggests that major investors have lost interest in hoarding more coins.
A similar trend is emerging among minors. According to data from CryptoQuant, bitcoin miner reserves plateaued at 1.86 million tokens, hovering around that level for nearly a month. The inactivity of miners follows a major drop in prices in August.
Despite data showing a bleak outlook for the number one crypto, the number of daily new addresses created on the network suggests Bitcoin could be showing a turnaround. The Bitcoin network is expanding, showing an uptick in retail interest since mid-July. The bullish divergence between the growth of the network and the price of the asset hints at a potential improvement in momentum going forward.
If network growth peaks above a seven-day average of over 417,000 addresses, the bullish narrative could be validated.
Transaction history shows that BTC established a critical support level at $19,000, where 1.21 million addresses bought over 688,000 BTC. This wall of demand must hold to avoid a sharp correction. If it fails to hold this level, a meltdown could ensue, potentially sending BTC to $16,000 or lower.
IntoTheBlock’s IOMAP pattern shows that bitcoin faces multiple resistance zones ahead. The largest is at $20,000, where 895,000 addresses hold almost 470,000 BTC.
It’s been a tough year for the markets, and Bitcoin hasn’t been spared the fallout. With bitcoin now nearly a year into a brutal bear market, there are several signs that suggest the fall may not be over. Even if new entrants join the network of the most important cryptocurrency, the global macroeconomic picture, the decline in sentiment and miner interest, and recent price action indicate that there is no clear reason for the bitcoin narrative to turn bullish anytime soon.
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