Many people have been trying to bring down the price of Bitcoin for the past week. This has caused the whole cryptocurrency market to drop a lot. It had been almost two months since the most expensive coin had been worth so little $59,000,500.
It’s still not clear if Bitcoin is ready to start going up again, but investors hope that the worst is over. A well-known crypto intelligence company, on the other hand, has found a key price level that could determine the future of Bitcoin.
CryptoQuant, a blockchain analytics tool, recently put out an interesting report about what they think the price of Bitcoin will be in the next few days. The company says that the $56,000 price mark is very important for the future of the cryptocurrency.
Bitcoin’s Critical $56K Support
The Metcalfe price valuation bands are the most important part of this analysis because they have shown us where resistance levels and tops were in earlier cycles. As you can see from the picture, these bands (the red line) were very important in May.
Metcalfe’s Law says that a network’s value is equal to the square of the number of people who use it. In essence, this law says that the value of Bitcoin is directly connected to how big and busy its network is. The Metcalfe price valuation bands, which are based on this concept, give a way to value things based on the network effect. They create a range of price levels that, in theory, show where Bitcoin should trade based on the basics of the network.
These bands have been stable levels of support and resistance in the past, when the market was going through different stages. As of late, the $56,000 mark has been an important one for this sign, which gave BTC strong support in May. This price level could be very important if BTC value keeps going down, according to CryptoQuant’s study. If the market winner goes below this level, it could have a big drop.
Bitcoin lost 2% in the past 24 hours, but it is now back above $60,700. Every week, the score stays in the red. CoinGecko data shows that BTC has dropped more than 6% in the past week. With a market value of more than $1.18 trillion, BTC is still the most important product in this area.
