Bitcoin leads the cryptocurrency market. And, every time it makes a move, it reflects on the performance of every other altcoin.
Of course, in the current market structure, investors are looking for profit opportunities. Furthermore, the on-chain analysis of the BTC network reveals that $ 28,000 could be a significant level for all investors.
Why does Bitcoin need $ 28k?
The short-term holder cost base (STH), an important indicator for showing investor conviction, is currently walking an inch below the ideal level.
Acting as a resistance against price action, the STH cost base must flip its stance into support. This will help Bitcoin recover from its recent losses.
In a declining market, the STH cost base does not have to be against resistance as the bearishness intensifies. Therefore, leading to an additional levy.
In 2018, when the king’s coin was experiencing a similar situation, the bearish trend continued for more than a year until BTC dropped from over $ 10,000 to around $ 5,000.
At press time, Bitcoin was trading close to the $ 22k threshold, the lowest price since January 2021. Therefore, making it highly susceptible to further depreciation if the indicator doesn’t reverse its position.
The same can only happen when BTC is able to rise by around 23.8% and cross the $ 28k threshold, which coincides with the STH cost base.
The chances of a Bitcoin rally at that point are slim as the two-week uptrend is losing strength. And this is verified by the drop in the average directional index (ADX) indicator below the threshold of 25.0.
The King’s coin held the 50-day simple moving average (SMA) (blue) line as support. But it could still lose as buying pressure has eased considerably.
As can be seen on the chart, the daily accumulation has been reduced by a large margin. This could make it even more difficult for Bitcoin to recover $ 28k.