While Bitcoin Faces Selling Pressure, Significant Increase in Network Fees is Observed!

  • Bitcoin (BTC) recently faced selling pressure, trading below $37,000 due to some whales’ sales.
  • Martinez suggests that if Bitcoin loses this support level, its price could easily drop by 15-20%, with the potential to retrace to $30,000.
  • Holding a BTC position collateralized in BTC increases the risk of liquidation as the collateral value decreases in sync with Profit and Loss (PnL) during a market downturn.

As Bitcoin’s price continues to be under pressure, network fees remain high: What levels must Bitcoin maintain to sustain the rally?

Bitcoin Prices Drop While Network Fees Remain High

Bitcoin (BTC) recently faced selling pressure, trading below $37,000 due to some whales’ sales. Meanwhile, Bitcoin network transaction fees continue to rise. According to popular crypto analyst Will Clemente, Bitcoin network fees have reached their highest levels since the original frenzy period in May of this year.

However, the analyst adds that there is not much reason to complain about high Bitcoin network fees. Slightly higher transaction fees may not be the most convenient, but as a Bitcoin holder, these high fees ultimately contribute to increased mining incentives, strengthening the security of the network, he says.

Currently, the BTC price is trading at $36,580, just above the critical support level of $36,400. Crypto analyst Ali Martinez suggests that if Bitcoin loses this support level, its price could easily drop by 15-20%, with the potential to retrace to $30,000.

Positive Derivative Structure and BTC Technical Setup

Analyst Will Clemente notes a noteworthy and positive trend in the market structure, which is the continuous decline in the percentage of Bitcoin futures contracts collateralized with BTC/crypto over almost three years. This ratio has dropped from 70% to the current 25%.

Holding a BTC position collateralized in BTC increases the risk of liquidation as the collateral value decreases in sync with Profit and Loss (PnL) during a market downturn. However, the current trend of generally collateralizing futures contracts with the dollar makes the overall market less sensitive to significant liquidation cascades. This change reduces sensitivity to large-scale liquidations but does not eliminate it entirely.

Crypto analyst Faibik conducted a comprehensive evaluation of Bitcoin price movement and set a target of $50,000 for the digital asset. According to the analyst, if Bitcoin maintains a range between $34,000 and $38,000 over the next two months, there is the potential to reach $50,000 by the end of March 2024, starting with a rally in mid-February.

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Lucien Renard
Lucien Renardhttps://en.coinotag.com/
Lucien Renard is a 24-year-old writer specializing in cryptocurrency analysis and price action. With a focus on technical analysis, Lucien provides valuable insights into market trends and potential opportunities for investors.
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