IntoTheBlock Shares Crucial Metrics to Watch as Bitcoin Breaks Below $30K

IntoTheBlock Shares insights into crucial metrics to pay attention to, as Bitcoin plummets below the $30,000 psychological support level.

IntoTheBlock, a prominent blockchain data resource, has shared crucial metrics to watch as Bitcoin (BTC) breaks below the $30,000 psychological support level, sparking concern among traders and investors.

According to a report shared today, IntoTheBlock pointed out that, despite the drop below $30,000, approximately 68.96% of Bitcoin holders are currently in a profitable position, which stands in contrast to many other altcoins struggling in the market. 

However, the report also highlights that 49.66% of the active addresses from the previous day are currently experiencing losses. Most of these addresses procured Bitcoin slightly above the current market price. 

This observation raises concerns about whether these investors will hold onto their tokens or resort to capitulation as the price of Bitcoin continues to decline. BTC has plummeted by over 7% in the last two weeks. Capitulation at this point would trigger higher selling pressure.

BTC Sees Positive User Growth

On a positive note, the report showcases a promising trend in user growth. Market participants have been steadily creating new addresses since May. This trend has resulted in a new annual peak. This suggests that Bitcoin continues to attract new users, which could bode well for its future price actions.

Furthermore, the New Adoption Rate metric, as highlighted by IntoTheBlock, further supports the positive trend in user growth. The ratio of new active addresses to total activity saw a spike in July following a period of relative stability. This suggests a potential increase in Bitcoin’s adoption.

Bitcoin Might be Overvalued

While some indicators look promising, the report also draws attention to concerning factors. The NVT ratio, a measure of network value to transactions, has risen to an all-time peak, suggesting that Bitcoin may be overvalued.

When an asset is overvalued, it means its current market price is considered higher than its real worth based on underlying fundamentals. This raises concerns about a potential price correction during an uptrend.

Another significant point emphasized in the report is Bitcoin’s volatility. IntoTheBlock noted that BTC’s volatility is at historically low levels. This low volatility has always been followed by substantial price movements, which could lead to more significant fluctuations in the market.

Bitcoin Price Position

Despite these potential concerns, the market cap of BTC against Ethereum (ETH) has been consistently increasing over the past year. Per IntoTheBlock, this indicates Bitcoin’s resilience and supports the prevailing notion that it will continue to outperform other altcoins in the foreseeable future.

Bitcoin BTC
Bitcoin Daily Chart

Notably, BTC rallied to a yearly high of $31,804 on July 13 following XRP’s victory in the SEC lawsuit. However, the asset has continued to shed the gains picked up. BTC has been struggling to retain its position above the $30,000 psychological level since dropping below it on July 14.

Amid intermittent declines, BTC slumped to a one-month low of $28,861 on July 24. The asset has failed to reclaim $30,000 since then. At a current price of $29,330, BTC is trading slightly below the 50-day EMA ($29,365) but it retains a value above the 200-day EMA ($26,839) on the daily chart.

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Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

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