Bitcoin’s price could be heading for further declines, according to crypto chart analyst Ali Martinez, who recently shared insights on X (formerly Twitter).
Martinez warned that Bitcoin’s price might fall below the Realized Price-to-Liveliness Ratio, a market metric used to evaluate whether BTC is overvalued or undervalued.
Currently, the ratio stands at $51,600. If Bitcoin falls below this level, historical trends suggest it could drop further to its Realized Price, which is currently set at $31,500.
Is $31500 Coming for Bitcoin?
The Realized Price-to-Liveliness Ratio is calculated by dividing the Realized Price, which is the average price at which all Bitcoins in circulation were purchased, by Liveliness, a measure of network activity. This ratio helps traders assess Bitcoin’s fair value based on historical market behaviour.
Martinez had highlighted the forces influencing the price of Bitcoin in earlier tweets. He pointed out that long-term holders maintained their confidence and kept buying even though many traders were liquidated during the most recent decline to $49,000.
Indeed, these purchasers purchased about 184,500 BTC, or around $10 billion, indicating a significant belief in the long-term worth of Bitcoin despite its volatility in the near term.
Martinez further emphasised that, in his opinion, there may be a great time to purchase Bitcoin because the cryptocurrency market has returned to a very dangerous place. Extreme market panic in the past has frequently corresponded with advantageous entry points for long-term investors.
Bitcoin’s Price Movements
Over the weekend, Bitcoin traded in a tight range between $54,000 and $55,000 amid lower volumes on exchanges, with minimal price movement ahead of a busy week in U.S. politics and economics. Bitcoin currently sits at $55,202.13, reflecting a 1.22% increase in the last 24 hours.
In the meantime, an inverted expanding triangular pattern was noticed on the price chart of Bitcoin by seasoned trader Peter Brandt. Known as a “megaphone” pattern, this pattern denotes heightened volatility and raises the possibility of a test of the lower barrier, which is now at about $46,000 per BTC. At its current price of $55,500, Bitcoin may suffer a 17% decline if the pattern holds.
The market players are anticipating volatility due to the impending U.S. Presidential debate and important economic data releases concerning inflation and consumer pricing. The trajectory of Bitcoin’s price soon may depend on several variables, including market indicators such as the Realised Price-to-Liveliness Ratio, technical analysis patterns, and external macroeconomic factors.
As the leading cryptocurrency negotiates both optimistic optimism and negative pressures, investors are eagerly watching these indications to determine Bitcoin’s future move.