After an impressive start to the third quarter, the price of Bitcoin has struggled to replicate its bullish form from July in the last two months. With less than two weeks to go, the flagship cryptocurrency has shown signs of mounting any real, sustained run to new highs.
However, the market seems to be drawing some confidence from the fast-approaching “Uptober” season, with many expecting the Bitcoin price to witness some upward momentum in the coming weeks. The latest on-chain data has identified a critical level to watch if the market leader is to retain this upward bias.
Why $114,500 Is A Critical Support Area For Bitcoin Price
In a September 20th post on the X platform, crypto analyst Axel Adler Jr. shared an interesting on-chain perspective on the current setup of the Bitcoin price. According to the online pundit, the price of BTC is likely to resume its bull run so long as it remains above the $114,500 level.
This evaluation revolves around the Volume-Weighted Average Price (VWAP) band, which represents the average price of an asset (Bitcoin, in this scenario) weighted by its trading volume. The metric plots two upper and lower bands, which act as dynamic support and resistance levels for the asset’s price.
According to Adler Jr., the 14-day VWAP band is currently absorbing the selling pressure faced by the price of Bitcoin. This band lies around the $114,500, making the price level a significant support cushion for the market leader.
Source: @AxelAdlerJr on X
The on-chain analyst noted that, so long as price holds above this $114,500 region, the premier cryptocurrency is likely to retain its upside bias. “As long as price holds above VWAP and avoids the lower half of the bands −1/−2, the base-case scenario is continued short absorption and consolidation with an upward bias,” Adler Jr. said.
Adler Jr. also highlighted the futures Pressure Index, which has dropped to 32.5 around quarterly extremes of bearish pressure. The Bitcoin spot market, though, continues to show good resilience, the on-chain analyst noted.
Now, investors would need to watch and see if this resilience translates to any real upward momentum in the coming weeks.
Bitcoin Price At A Glance
As of this writing, the price of BTC sits just below $116,000, reflecting no significant movement in the past 24 hours.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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