Bitcoin [BTC] Bears are showing signs of weakness as this metric slows

A few days ago it became apparent that Bitcoin [BTC] was in a price RSI divergence pattern. This was an indication of relative trend weakness for the bears and one that would give way to a retracement. Fast forward to the present and that retracement is there, but even the bears are showing some weakness now.

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Bitcoin’s price at press time of $23,909 represented a 5.4% decline from its recent peak, which was also its current 2023 high. This may not be much in the grand scheme of retracements, but it is an indication of low selling pressure. Given the optimistic market expectations, this is not surprising.

Source: TradingView

If Bitcoin maintained its pattern at press time, the next buying wall could be expected near the $23,500 price level. This was the same price range that the price rallied in on February 16th and the same level previously acted as a resistance range. There were a few key observations that perfectly summed up BTC’s performance.

The exchange flow characteristics reveal this about Bitcoin

Bitcoin exchange flows have been trending in favor of the bears for the past few days. However, the selling pressure has decreased significantly every day. The latest Glassnode alerts, which track daily on-chain flows, show that Bitcoin net flows totaled -$29.5 million for Feb. 24.

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📊 Daily on-chain exchange flow#Bitcoin $BTC
➡️ $687.8M
⬅️ $717.3 million out
📉 Net flow: -$29.5M#Ethereum $ETH
➡️ Raised $363.8 million
⬅️ $341.2 million out
📈 Net Flow: +$22.6M#Tether (ERC20) $USDT
➡️ $587.7M
⬅️ $659.8 million out
📉 Net Flow: -$72.0Mhttps://t.co/dk2HbGwhVw

— Glassnode Alerts (@glassnodealerts) February 24, 2023

The same tracker revealed that bitcoin had a net flow of -$40.1 the day before and +$52.9 million the day before. This confirmed a return in general selling pressure, although slowing at press time. This was confirmed by the metric of stock market inflows, but stock market outflows also showed a similar result.

Source: Glassnode

The latest exchange rate data shows that FX outflows have been slightly higher than inflows. Open interest has also been declining over the past few days, but has leveled off as of the time of writing. A potential turning point in demand for derivatives may be on the horizon.

How much is 1,10,100 BTC worth today?

Are the cops ready to take over?

Perhaps looking at where most purchasing power is coming from can provide some useful insights. Bitcoin’s supply distribution shows addresses holding between 1,000 and 10,000 BTC pivoting during yesterday’s trading session and piling up at press time.

Source: Santiment

This observation was important as the same category of addresses controlled the largest supply of BTC in circulation. The reason why no upward movement has started despite this observation is that addresses with over 10,000 BTC have done the opposite and thus contributed to the selling pressure.

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