Bitcoin Drops 3% After $97,000 Peak, Analysts Eye $150,000 Target

Bitcoin experienced a slight decline after reaching a new peak above $97,000 on May 2, retreating to just below $94,000, marking a 3% to 4% decrease from its recent high. While short-term price movements have kept traders on edge, longer-term on-chain data is beginning to show signs that could influence future trends.

One key indicator, known as the Bitcoin Composite Index v2.0, currently stands at a reading of 0.8. This index combines price action with blockchain activity to gauge Bitcoin's potential direction. According to analyst Constantin Kogan, similar readings have preceded significant price rallies in the past, such as in 2017 and 2021. Kogan noted that if this index rises to 1.0 and maintains that level, Bitcoin could accelerate significantly. Although the index has not yet reached 1.0, it is trending in the right direction. The "Running ATH Price" component of the index has also started to trend upward, suggesting that more buyers are entering the market and confidence may be rising.

If Bitcoin sustains its momentum and drives the Composite Index above 1.0, analysts predict a sharp price increase, with targets ranging between $150,000 and $175,000. However, if the index remains between 0.8 and 1.0, Bitcoin may experience a range-bound market, fluctuating between $90,000 and $110,000. Kogan also mentioned a less likely scenario where, if the index falls below 0.75, Bitcoin could correct back to the $70,000 to $85,000 range.

The UTXO Realized Price Distribution chart, provided by analyst Checkmate, offers additional insights. This chart plots where Bitcoin holders last transferred their coins, indicating who bought at what price. A significant number of buyers entered the market between $93,000 and $98,000, making this region a crucial supply zone. Currently, Bitcoin is trading around $94,000, and the next move will depend on whether the price breaks out strongly or gets rejected. A strong breakout could turn recent supply into profit and drive prices higher, while a failure to rise through this area could create a lower high and attract additional selling pressure.

At present, Bitcoin is in a holding pattern. Traders and analysts are closely monitoring both the Composite Index and supply figures to determine whether the current lull will lead to the next leg up or a further decline.