The price of Bitcoin (BTC) fell to the key $ 44,000- $ 45,000 support level for the third time in the past week on February 28th.
The BTC / USD pair briefly fell below $ 44,000 on Bitstamp before hitting some of the losses, while bouncing back above $ 45,000 at this point.
‘Complete rest’ for SOPR, funding rates
Some analysts have cited an increase in miners’ sales as the reason for the recent price drop.
It’s a whale war, and you know who has the right power.
US institutional investors
– Coinbase outflow = STRONG BUY
– Coinbase Premium = BUYBTC Walvisse
– BTC Reserve = BUY
– Stablecoin Inflow TXs = BUYMiners
– Miner outflow = SALE
– Miner-to-AC = SALE pic.twitter.com/fhVBp8qocm– Ki Young Ju 주기영 (@ki_young_ju) 28 February 2021
Fortunately, the third retest of this key support level could have a silver lining for the bulls. Data analysis resource Glassnode noticed that the daily Bitcoin Spent Output Profit Ratio (SOPR) has seen a “complete reset”.
The SOPR essentially shows whether expenditure at the time of the transaction is in profit or loss. This important measure has become negative for the first time since September 2020. In other words, investors are now moving BTC at a slight loss, indicating that profit-taking has declined, according to Glassnode.
“In total, we saw a net realized loss of $ 243 million on the chain yesterday,” the analysts said added.
“This is the lowest daily value since April 2020.”
Meanwhile, popular trader Philip Swift, co-founder of the Decentrader trading pack and creator of the Golden Ratio multiplication method, also pointed out the SOPR accident.
He sees this as a potentially bearish reversal for the BTC price combined with the reset of derivatives funding rates last week, as such events have coincided with the rise of new rising trends in the past.
“The SOPR has now been restored (green on the chart), which means that wallets that are now selling are being sold at a loss,” he explained, adding:
“This is a strong ‘buy the dip’ signal in a bull market. It is bullish, along with derivative funds that have recovered.”
The last time the SOPR turned green was five months ago when Bitcoin traded around $ 10,000. At the time, it was a major obstacle for BTC to trigger a new bull market. Since then, the price has risen more than five times to new overall highs of around $ 58,000.
Nevertheless, many traders remain cautious as the market enters March, which has historically been bearish for cryptocurrencies and all markets in general.
“I think March may be slow with a lack of confidence in traditional markets, but I am generally strong Bitcoin and expect significantly higher over the next three months,” Swift said in private comments.
$ 44,000 – $ 45,000 remains the most important level to look at
Meanwhile, Bitcoin traders are keeping a close eye on the $ 44,000- $ 45,000 level. Trader Willy Woo, for example, says the $ 45,000 level is very strong support and expects any declines below this level to be bought up aggressively.
UTXO realized price distribution. This is the more accurate version of the volume profile on the chain. The peaks represent the price at which most coins changed hands.
$ 45,000 upward is very strong support.
Any dip (if you’re lucky) in $ 39,000 is a no-brainer BTFD.
Information: @glasnode pic.twitter.com/Z4xbEr0jTv
– Willy Woo (@woonomic) 27 February 2021
Furthermore, researchers at the chain analysis firm Santiment believe that the entire cryptocurrency market now depends on the fact that Bitcoin is above this key level.
“It’s been a red weekend so far, with most eyes on Bitcoin, as it has fallen back against the climb that altcoins have made,” they said, and add:
Watch the $ 44,000 support level for BTC as an indicator to monitor for all crypto. As well as BTC’s chain activity.