Bitcoin has been above the round $30,000 mark for almost a week, but has now slipped below it.. Perhaps this is due to the BTC dominance index and the behavior of long-term investors
According to the results of the 1st quarter of 2023, Bitcoin (BTC) became the most effective asset, having strengthened by about 70%.
In April, its rate continued to grow and broke through the significant psychological barrier of $30,000.
At the same time, the total capitalization of the global crypto market is now approaching $1.26 trillion, reflecting the growth of investor confidence not only in bitcoin, but also in other cryptocurrencies.
BTC Dominance Index Under Pressure
Probably, the expectations of the altcoin season could play a role in the current correction of the BTC rate from recent highs.
Bitcoin Dominance Index BTCD Lost 2% Over Last Week. Recall that this is an on-chain metric that shows the ratio of bitcoin capitalization to the entire digital asset market.
As you can see from the chart below, this figure has dipped from 49% (as of April 12) to 47% (as of April 17).
Such a decline in the BTC dominance index may indicate that the market is turning its attention to altcoins..
In such a scenario, it is not uncommon for Bitcoin to lose some of its market share as investors may start selling it to buy other currencies..
Accordingly, this may cause a short-term drawdown in the price of bitcoin.
Recently, the editors of BeInCrypto have already talked about the relationship between BTC, BTCD and the market capitalization of altcoins (TOTAL2).
Wrong long-term hodlers
In addition, this assumption is supported by the dynamics of BTC balances at the addresses of long-term hodlers.
According to IntoTheBlock, investors who have held their assets for more than one year have begun withdrawing some of their funds from BTC in recent weeks.
Between April 9 and April 17, this group of long-term hodlers reduced their holdings by 300,000 BTC (about $9 billion).
This probably reflects their interest in altcoins as part of their asset diversification and search for higher returns.
Meanwhile, short-term investors and speculative traders have increased their balance sheets by 17% over the past 30 days..
Such multidirectional trends can lead to a slow growth of the coin and its high volatility..
Thus, the behavior of long-term investors may promise a moderate correction in the BTC rate in the coming weeks.
BTC Forecast: Strong support is at $28,300
According to IntoTheBlock’s Global In/Out of Money Around Price (IOMAP) stats, Bitcoin is unlikely to plummet below $28,000..
Recall that this metric tracks addresses that are approaching the breakeven level and reflects the distribution of hodlers along the lines of the average coin purchase price, thus highlighting areas of significant resistance and support.
As you can see from the chart below (as well as from the current market situation at the time of writing), the $29,300 area (where 405,000. addresses that bought BTC at these levels) may resist the onslaught of the bears.
If this support is pushed through now, a larger barrier will come into play at $28,300.. Here are located 824 thousand. wallets holding 519 thousand. монет.
On the other hand, the bulls are activated in case of absorption of the recent local maximum in the area of $30,750, although the growth rate may contain 1.3 million addresses from 633 thousand.
BTC who may want to take profits. A break of this resistance will aim the market at the next significant resistance at $33,000.