Renowned cryptocurrency expert Ali Martinez issued a warning in a recent research after Bitcoin (BTC) fell below a crucial supply zone, which is located between $41,200 and $42,400.
Martinez used IntoTheBlock’s on-chain data to show that 1.87 million addresses—which together held a significant 730,000 BTC—were gathered in this risky area.
Concerns over possible sell-offs have been aroused by the downturn because investors may want to reduce losses, which would increase selling pressure. Martinez warns of a possible drop to the next demand zone, which is $1.28 million addresses with 553,000 BTC, between $37,500 and $38,700.
In spite of these cautions, two situations come into play. According to Martinez’s data, purchasers who are making money are concentrated at prices that are around 7% lower than those of the present market.
So the issue is, in this wild market where “black swan” occurrences are always possible, would buyers show interest if holders at a loss start selling and the market pulls down below $38,700?
Gap
The CME’s Bitcoin futures chart, another market signal that suggests a possible decline, adds to the cautious stance. Early in December, a gap developed that ranged from $39,640 to $40,325 per Bitcoin. Normally, gaps of this kind are anticipated to shrink.
If past performance is any indication, this gap may be closed as part of a bearish move, which would support a down to $37,500. Bulls are holding strong, but the impending difficulties could finally test their fortitude
