Bitcoin (BTC) presents investors with a unique opportunity to buy at a support zone with a “100% long hit rate,” according to new analysis by crypto asset manager Capriole Investments. In their latest update, Capriole advised investors to monitor a potential BTC price drop to $24,000.
Despite Bitcoin currently hovering around $26,000, many market participants are predicting further downside for its price. While $25,000 is a popular target for bears, Capriole is more interested in long-term trend lines with a proven track record.
Among these trend lines are Bitcoin’s weekly support zone at $24,000 and its “Electrical Price” (EP), which represents the average miner’s electricity bill per BTC worldwide and currently sits just above $23,000. The EP has consistently acted as strong support throughout Bitcoin’s history, including during the dip to two-year lows in November 2022. In late December of the same year, the EP even hit lows slightly above $14,000.
Capriole describes the EP as a “historically hard price floor and level with a 100% long hit rate.” The combination of the weekly support zone and the EP provides strong confluence from both a fundamental and technical perspective, making the $23,000 to $24,000 range an attractive opportunity if Bitcoin were to reach those levels.
Capriole founder Charles Edwards expresses his confidence in $23,000 as a robust support level, stating, “I am feeling very confident in $23K being a rock solid support and an incredible long-term opportunity if we get there in the next few weeks.” Edwards has high regard for the EP, calling it his favorite long-term Bitcoin metric.
The trend lines identified by Capriole are seen as promising and rare structures for Bitcoin and are worth paying attention to. The potential support at $23,000 to $24,000 presents a significant opportunity for investors if it is reached.
However, the future of Bitcoin’s price remains uncertain. As of August 29, BTC/USD was trading close to $26,000, and some analysts believe that Bitcoin miners may experience financial pressure similar to that seen in 2019, which laid the foundation for the next bull run. James Straten, a research and data analyst at CryptoSlate, notes that Bitcoin miner revenue is currently just above the 365SMA of $22.5 million, resembling the behavior observed in 2019 before a price drop.
Data from Glassnode also indicates that miners are earning less than their yearly average in 2020. Dylan LeClair, a senior analyst at digital asset fund UTXO Management, refers to this phenomenon as “tradition.”
It is important to note that this article does not provide investment advice or recommendations. Investors should conduct their own research and make informed decisions due to the inherent risks involved with investments and trading.
In conclusion, Capriole Investments believes that Bitcoin’s potential dip to $24,000 presents a significant buying opportunity supported by strong long-term trend lines. The $23,000 to $24,000 range is considered a historically hard price floor and an attractive level for investors. However, the future of Bitcoin’s price remains uncertain, with some analysts suggesting similarities to previous price behavior observed in 2019.