Bitcoin Price Outlook: Possible Dip Below $80,000 — Here’s What You Need to Know

Bitcoin's price movement has shown limited activity in recent weeks, as market bulls and bears engage in a tug-of-war. As a result, the leading cryptocurrency has been fluctuating between the $89,000 and $93,000 marks during this period.

Key Takeaways

Bitcoin's price remains confined between $89,000 and $93,000 as market forces balance out.
An upcoming price correction could see Bitcoin dip to the $74,000 - $80,000 range, a potential 20% drop from current levels.
The URPD metric highlights significant trading activity at certain levels, influencing support and resistance.
34% of Bitcoin's total supply is currently above the $90,000 mark, potentially establishing a new support level.
Caution is advised in interpreting distribution clusters, particularly in the $84,000 range.

Bitcoin

Recent on-chain data indicates that this sideways price action is tied to the uneven distribution of Bitcoin’s total supply across different price levels. This analysis has also shed light on potential future price movements for this market leader.

Could Bitcoin's Price Drop by 20%?

On December 13, the anonymous analyst Darkfost shared insights on the X platform, highlighting that Bitcoin's price is currently trapped between $89,000 and $93,000. This observation is based on the distribution of BTC supply, particularly utilizing the UTXO Realized Price Distribution (URPD) metric across various price levels.

The URPD metric helps track the amount of Bitcoin traded at specific prices. When a considerable amount of Bitcoin trades at a particular level, that level becomes significant; it typically acts as support when prices are above it and resistance when prices fall below it.

Darkfost explains that this is why Bitcoin appears stuck in the $89,000 to $93,000 range (shown as the yellow area in the chart). This zone has experienced substantial trading activity, validating the price oscillation within this range.

An interesting factor to note is the identified "distribution gap" (illustrated in blue) within the $74,000 to $80,000 range, where historical trading activity is relatively low. Darkfost points out that these low-liquidity areas often pull Bitcoin's price as the market seeks to balance supply and demand.

Bitcoin Source: @Darkfost_Coc on X

The chart indicates that this distribution gap exists between the $74,000 and $80,000 range, suggesting that Bitcoin's price may experience a correction towards this level before potentially rallying to new highs. Such a correction could represent a drop of nearly 20% from its current price.

Additionally, Darkfost noted that 34% of the total supply of Bitcoin is currently situated above the key psychological level of $90,000, which may evolve into a structural support level for Bitcoin's price moving forward.

It’s important to mention that while there is a notable distribution cluster around $84,000, this should be interpreted with caution. Darkfost noted that this level may not be as significant as it appears but is largely influenced by Bitcoin movements from Coinbase.

Current Bitcoin Price Overview

At the time of this writing, Bitcoin is trading at approximately $90,150, showing no major changes in the last 24 hours.

Bitcoin The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView