- Bitcoin saw significant selling pressure for a week after failing to hold the $30,000 range.
- Weekly selling pressures may slow as long liquidations decline.
Bitcoin [BTC] was bearish after failing to sustain bullish strength above $30,000. Some analysts expected such an outcome and even predicted a significant pullback. But is a strong pullback below $20,000 likely if these predictions are correct?
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Here’s what we know so far based on current data. The recent Glassnode alert revealed that the amount of bitcoin offerings active over the past 2-3 years just spiked to a 2-year high.
This meant that many people holding BTC had started moving their coins. Such a result suggests that many of them might sell their coins in anticipation of higher selling pressure.
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📈 #Bitcoin $BTC Amount of Supply Last Active 2y-3y (1d MA) just hit a 2-year high of 2,654,292.828 BTC
View metric: https://t.co/ov1FrjgNQz pic.twitter.com/fsYCSFvLh8
— Glassnode Alerts (@glassnodealerts) April 23, 2023
The declining expectations also reflected the current market situation. BTC just wrapped up a bearish week marked by whale outflows.
Whales have been trimming their balances since mid-April, according to addresses with balances of 1000 BTC and above.
Source: Glassnode
Meanwhile, futures-long liquidations rose since mid-April but declined on April 21. Why is that important? Well, the initial spike in liquidations may have resulted in more selling pressure as leveraged traders were forced to sell.
However, the drop in long liquidations suggested that selling pressure might be easing.
Since the middle of the month, BTC exchange inflows have dominated versus outflows. Stock market outflows also increased, likely due to investors buying the price drop. The flow rate for both has slowed for the past two days.
Source: Glassnode
Interestingly, the latest exchange data showed that BTC exchange outflows were slightly higher than inflows. This was a sign that demand was beginning to outweigh selling pressure. But does this reflect price action?
BTC price action
Bitcoin’s price at press time of $27,557 was hovering above its 50-day moving average, which could act as a psychological buying zone. But is a strong recovery possible at this point? Yes, but also the possibility of an extended disadvantage.
BTC has been trading within a support and resistance range. The latest pullback since mid-April came after the price retested the ascending resistance line indicated in the chart below.
Source: TradingView
How much is 1,10,100 BTC worth today?
So what should investors watch out for? A strong resurgence in demand after the 50-day moving average could signal a strong recovery. Weak demand can pave the way for continued selling pressure.
The second result could prompt more selling which will eventually push towards the ascending range of support. Such a result would lead to the next major retest of support near the $22,900 price range.
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