Bitcoin (BTC) Price May Have Hit a Brick Wall After Recently Breaching the $65,000 Mark

This on-chain analysis highlights the indicators affirming this forecast and what investors should expect in the near term.

Bitcoin’s (BTC) recent price increase to $65,497 seems to have hit a snag, and several on-chain metrics indicate that the coin may pull back before attempting to retest $70,000.

This analysis examines the indicators suggesting a potential price drop and explores what investors can expect in the near term.

On-Chain Metrics Suggest Time for a Pullback

Bitcoin’s price rise is surprising, considering that at the beginning of September, many expected it to be bearish. However, the price Daily Active Addresses (DAA) divergence suggests that BTC could drop before making any attempt to reach $70,000 again.

The price DAA measures whether user engagement increases as a coin’s value rises. When the price increases together with active addresses, it is a buy signal, and the cryptocurrency can increase in value.

At press time, Bitcoin’s price DAA had dropped to -54.89%. This decrease shows that market participants are engaging less with the coin. As such, the recent uptrend might be weak, as this is a sell signal.

Moreover, the coin’s performance has had an impact on holders’ profitability. On September 16, 79.92% of Bitcoin holders were in the money. But according to the Historical In/Out of Money (HIOM), which compares addresses making a profit at different price ranges, 91.97% are now in the money.

Historically, when the ratio has reached such levels, some holders take profits, leading to a decrease in Bitcoin’s price. For example, something similar happened in July when the holders in profits were about 93%.

A few days later, it dropped to 78%. Another scenario occurred on August 25 when the percentage was 88.35%, and the decline in Bitcoin price later led to 76.23%. Therefore, if history rhymes with the current condition, BTC could be set for a short-term drawdown.

BTC Price Prediction: $60,000 Coming

While the price is expected to produce a positive return, the daily chart shows that Bitcoin’s attempt to reach $69,000 has encountered resistance, and the bears are trying to overthrow the bullish dominance.

If the price drops below $65,000, the $65,838 region will be a major resistance zone. However, buyers will likely try to defend BTC from going below support at $63,093. The chart below shows that this potential defense could fail.

Bitcoin’s price could decrease to $60,348 within a few days. On the other hand, a close above $65,838 will tilt the trend in the bulls’ favor. In that scenario, Bitcoin might jump to $68,236.