According to CoinGecko data, the price of Bitcoin (BTC), which fell below $60,000 last night, has risen above $61,000 again today. However, cryptocurrency analysts believe that the risk of a price drop still persists.

Revealed the critical level for Bitcoin

Julio Moreno, head of research at the blockchain data platform CryptoQuant, stated that according to Metcalfe valuation, $56,000 is a support level for Bitcoin.

This valuation model is based on Metcalfe’s law, which suggests that the value of a network is proportional to the number of users in that network. For this, the number of daily active addresses on the Bitcoin blockchain is taken into account. Since the number of active addresses can change frequently, the 365-day moving average is considered.

Warned about a major correction

Regarding the Metcalfe model, the CryptoQuant researcher said, “This indicator had shown resistance and peak levels in the previous [market] cycle but functioned as support in May.”

Julio Moreno commented, “A major correction could occur below this level.”

The CryptoQuant researcher also pointed out that investors, whales, and exchange-traded funds (ETFs) have shown less demand for Bitcoin recently.

Note: This is not investment advice