Bitcoin’s way to $50,000 might not be as easy as it may seem
According to data provided by IntoTheBlock, Bitcoin’s spike above $47,000 does not necessarily mean the top cryptocurrency is on its way to $50,000, as there are at least two major resistance points ahead of it.
Upcoming Bitcoin resistances
As the In/Out of Money Around Price indicator developed by IntoTheBlock suggests, Bitcoin currently consolidates at a major resistance that keeps the cryptocurrency from breaking through $48,270 resistance point.
The next resistance before $50,000 would be the range from $49,620, in which almost 1.5 million addresses opened their positions. The mentioned range, on the other hand, is significantly smaller than the $47,796-$49,211 resistance zone, with a total volume of 1.16 million BTC.
The most actual resistance remains significantly larger compared to the closest support which, according to the indicator, ends at $46,312.
Why does IOMAP work for Bitcoin?
Although the indicator itself cannot be used to determine exact resistance or support points, information about the concentration of funds around a certain price could give traders an idea of the potential pace of movement of the asset.
The predictions that traders make using the indicator are based on holders’ psychology; traders who remain in loss for a long time tend to sell or get rid of their assets right at the point of entry to avoid losses if the asset retraces for whatever reason.
In the example provided, the range of $47,796 to $49,211 contains approximately 2.4 million addresses that opened almost 1.2 million BTC of positions, which means that a portion of the funds concentrated in the range can be sold when the first cryptocurrency enters the zone, which will create huge pressure on the price of the asset.
