Bitcoin's Price Holds Near $96K, Bulls Defend $80K

Bitcoin's price trajectory has been a subject of intense speculation, with some analysts predicting a potential crash to $80,000. As the world's largest cryptocurrency continues to navigate a volatile market, several key indicators are shedding light on critical price support areas.

According to Glassnode, an adjusted MVRV Z-Score can help approximate areas of critical price support for Bitcoin. The recent analysis reveals that Bitcoin's price has so far held near its mean level of approximately $96,300, acting as a temporary buffer in a period of market uncertainty. However, if prices break lower from this level, the next major line of defense for bulls is likely to be found at the $80,100 level, which represents a key support below which further selling could occur if breached.

Another key indicator is Bitcoin's Short-Term Holder (STH) cost basis, which currently sits at about $92,200. This level has historically served as a key support for the uptrend, providing a foundation for buyer confidence in the event of a fall. Per this indicator, the $71,000 to $131,000 range defines typical price bounds. The good news is that Bitcoin's spot price remains within this range, suggesting that bulls still have control, but defenses are being tested.

The URPD volume profile reveals a liquidity gap below current support levels, meaning that few coins were transacted in this range. The STH cost basis at $71,000 sits at the upper bound of this gap, making it a sensitive area if the price moves lower. The $131,000 price bound hints at Bitcoin's price target if it breaks to the upside.

As Bitcoin continues to put up lackluster price action below $100,000, key events this week have the potential to revive market activity. FTX, once the world's third-largest digital asset exchange, is about to commence its first round of creditor payouts after falling bankrupt in late 2022. Wednesday will bring the minutes of the Federal Reserve's January meeting when interest rates were held steady. In an appearance last week, Fed Chair Powell stated that the bank was not in a hurry to cut rates and would want to see further progress on inflation.