Popular crypto analyst Ali Martinez has warned of a potential significant decline in Bitcoin’s price if critical support levels are breached. He suggests a drop of up to 27%, which could affect the broader market.
UTXO Model and Key Support Levels
Martinez utilized the Unspent Transaction Output (UTXO) Realized Price Distribution (URPD) model to analyze Bitcoin’s price movements. This model shows the number of coins last transacted within specific price ranges, offering a clear view of potential resistance and support zones. According to this model, if Bitcoin’s price falls below $93,806, it could face a swift plunge to $70,085, a level investors should closely monitor.
Investor Behavior and Bearish Sentiment
The analyst pointed out that some investors are preparing for a potential bear market. Large quantities of Bitcoin have been transferred to exchanges, signaling an increase in selling pressure. Last week alone, approximately 33,000 Bitcoin (worth $3.23 billion) were sent to exchanges, while $7.17 billion worth of Bitcoin profits were realized on December 23. Adding to the concerns, the number of traders betting on Bitcoin’s rise has significantly decreased on Binance. Open long positions on the platform fell from 66.73% to 53.60%, indicating a growing bearish sentiment in the market.
Importance of Critical Support Levels
Martinez emphasized the importance of the $100,000 level serving as a strong support to stabilize the market. The IOMAP metric suggests that reclaiming this level as a support zone could be pivotal for restoring confidence and maintaining Bitcoin’s upward trajectory.
Martinez's expert insights highlight the importance of maintaining key price levels to prevent a bearish market scenario. Investors should pay attention to the data and market participant behavior in the near future.
