Bitcoin’s price has been under a lot of bearish pressure over the past week, which has also dragged down a large percentage of the overall crypto market. There was a point this week when the leading cryptocurrency fell to $59,500, its lowest level in nearly two months.
Investors could think that Bitcoin’s worst was behind us. However, it is challenging to determine whether Bitcoin is ready to resume its upward trend. Anyway, a well-known crypto intelligence company has determined a price point that will be crucial for the direction of Bitcoin’s price in the future.
$56,000 is the final support level for Bitcoin: CryptoQuant
Blockchain analytics platform CryptoQuant recently released a report that included an interesting forecast for the price of Bitcoin in the coming days. The company claims that the $56,000 price point is crucial for the future performance of the top cryptocurrency.
The Metcalfe Price Bands are an indicator that is relevant in this case because they identify resistance levels and cycle tops. But in May, these bands—the red line—acted as a crucial support area, as the graphic below shows.
To put things into perspective, the Metcalfe Law states that the value of a network is equal to the square of its user base. Essentially, this law implies that the size and activity of a cryptocurrency’s network are inextricably related to the value of that cryptocurrency, or Bitcoin.
This idea is the basis of Metcalfe price evaluation bands, which provide a framework for network impact evaluation. Based on network characteristics, these bands produce a set of price levels that assess where Bitcoin should ideally trade.
These bands have served as dependable levels of support and resistance during various market cycles in the past. The indicator’s pivot point in recent months has been the $56,000 mark, which provided solid support for Bitcoin’s price in May.
According to CryptoQuant’s analysis, the price level could become crucial if the top cryptocurrency declines further. But if Bitcoin’s price falls below this barrier, the market leader could see a significant decline.
A look at the price of bitcoin
The price of Bitcoin has dropped 2% in the past day and is currently trading back around $60,930 as of this writing. The weekly period shows a deeper red performance for the coin.
Data from CoinGecko shows the BTC has fallen by about 6% in the past week. Still, with a market valuation of over $1.18 trillion, cryptocurrency remains the largest asset in the industry.
