Bitcoin Risks Losing Support at $77,700 and Turning It into Resistance

Bitcoin (BTC) may turn $77,700 into new resistance: the price has fallen below the acquisition level of investors who entered the market one to three months ago. According to the analytical platform CryptoQuant, this group is considered speculative traders, more sensitive to short-term volatility. During bull markets, their average purchase price served as upward support.

“When BTC falls below this level, the same average purchase price may later act as resistance: traders in loss use the return to breakeven as a reason to exit,” states the Monday analysis by CryptoQuant. According to the metric of realized price bands for traders in the network, the level is currently $77,700, while BTC/USD is trading around $76,500. “It is also notable that the average realized price of traders steadily increased while BTC was correcting. The gap between the price and the average purchase price has now noticeably narrowed,” the author added.

BTC/USD was above the average realized price of traders since August 19 and only recently fell below. The bands include upper and lower moving boundaries around the average purchase price with fixed profit and loss limits. The nearest lower boundary corresponds to a 12% cumulative loss and is currently $68,400. The price broke through it in early June, after which it deviated up to 12.6% below for a month.

Short-term holders

Below $77,000, Bitcoin is approaching the average purchase price of a broader group of speculative investors – short-term holders who have not sold their BTC for up to 155 days. Their average purchase price on Tuesday is $75,832. This corresponds to a value of 1.012 on the market value to realized value metric: the market value of their coins is divided by the realized value at the prices of the last movements in the network. If the price falls below the breakeven point on this metric, the next key psychological level is 0.85, known as the “tactical capitulation” zone or “trap for short sellers.” The last time BTC/USD broke this level was in early June and recovered it in mid-August.