Bitcoin price has re-established the $ 40,000 level as support, but if a bull pushes to a new everyday high, the possibility of another sharp sell-out is.
According to analysts at Material Indicators, a crypto-analytics firm, mega-whales sold strongly when Bitcoin reached $ 40,000 on January 7th. This led to a rapid 10% drop to the $ 36,000 range over the next few hours.
The dip was quickly bought up and eventually pushed the price above $ 41,000 in the next 12 hours. BTC, however, experienced another big drop after setting another everyday high at $ 42,000, and at the moment it is writing the highest position of digital asset at $ 40,800. According to material indicators:
‘So it looks like mega whales started selling around 02:00 UTC after that landfill, and continued to sell on the nails. My guess is that they would expect more disadvantages. They did not really participate until 42k in the rally, which would further support the point. ”
In the most recent retreat from $ 42,000 to $ 40,000, Fred explained that smaller whales, who own $ 100,000 to $ 1 million, are starting to make a profit. He noted:
“However, they have now started buying again. Presumably to break the 42k resistance. It first looks like the normal whales ($ 100,000 – $ 1 million class) that started making a profit. ”
Considering that the Bitcoin price has sometimes traded higher on Coinbase over the past week, it is clear that there is a huge demand from the buyer from the US.
This suggests that there is a battle between normal profit-making whales and new buyers in the US market. The sharp rejections of each new record are also a sign that whales can aggressively make a profit once Bitcoin reaches a new record.
As such, it is important that the demand for Bitcoin is sustained in the short term. Otherwise, the high level of whale sales could cause BTC to see a correction in the foreseeable future.
Where can Bitcoin go from here?
Bitcoin currently has a very strong technical momentum that continues to increase the price. For this reason, traders are reluctant to shorten it, but some have started taking profits.
In the short term, Bitcoin is a concern about the possible recovery of the US dollar. A pseudonymous trader, known as ‘Cantering Clark’, noted the downturn in the US dollar and the fall in precious metals. He said:
“So the question is: if the $ DXY surprisingly finds a floor, and metals that respond by getting nuk, does $ BTC hold up well?”
The US Dollar Index (DXY) hangs on a support level in the monthly chart. Alternative value stores, such as Bitcoin and gold, are priced against the dollar. Thus, if the dollar starts moving upwards, the risk of a BTC correction may increase.