The cryptocurrency market remains under high tension as Bitcoin, after a sharp drop in early September, attempts to regain stability. Having gone from $53,700 to over $60,000 in the space of a few days, Bitcoin is at a strategic crossroads. While this rebound may seem promising, experts remain cautious. Analysts at ARK Invest highlight critical support levels that, if they fail to hold, could plunge the market into uncertainty again.
Bitcoin Tests $52,000 Support
During the month of August and especially at the beginning of September, Bitcoin suffered a significant drop, even reaching a low of $53,700. But since then, the queen of cryptos has managed to rebound and is currently trading above $60,000 as of September 15. Despite this recovery, the market remains under pressure and investors remain cautious. According to analysts at ARK Invest, this rebound could be just a pause in a more volatile trend, as Bitcoin is still at a “moment of truth” with critical support levels to watch.
In its latest report, ARK Invest highlights that the most critical support levels for Bitcoin are at $52,000 and, more importantly, $46,000. These levels do not correspond to the current price, but represent key technical levels where Bitcoin could find support in the event of a further correction. The $46,000 level is particularly watched, as it corresponds to market indicators such as cost averages and historical investor behavior. If this level were to give way, it could trigger a new wave of selling and deepen losses, further weakening investor confidence.
Challenges for Institutional Investors and Bitcoin ETFs
Additionally, according to ARK Invest, the average cost basis of Bitcoin ETF participants in the United States currently exceeds the price of Bitcoin, meaning that many institutional investors are at unrealized loss. “As of the end of August, the average cost basis of participants in U.S. Bitcoin ETFs was higher than the price of Bitcoin,” the report states. This exposes institutional investors to increased risks, which could lead to short-term selling to limit losses in a volatile market environment.
Despite this pressure, some indicators remain supportive. ARK Invest notes that liquidations by short-term holders remain relatively low, and that the macroeconomic backdrop continues to support Bitcoin’s performance. Additionally, the MVRV Z-score, a key metric comparing Bitcoin’s market cap to its cost basis, remains in a zone associated with bull markets. This suggests that despite the current turbulence, Bitcoin could avoid a prolonged slide if it can hold off from the indicated support levels.
Regardless, the market remains volatile, and the next few days will be decisive for the future of Bitcoin.
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