Bitcoin’s price has reinstated the $ 40,000 level of support, but with the momentum towards an all-time high again, the possibility of another sharp settlement is approaching.
According to analysts at Material Indicators, a cryptography analysis firm, megabaleias sold strongly when Bitcoin reached $ 40,000 on January 7. This led to a rapid 10% drop to the $ 36,000 area in the next few hours.
The drop was quickly bought, taking the price to more than $ 41,000 in the next 12 hours. However, BTC saw another big drop after setting another historical record at $ 42,000 and, at the time of writing, the highest-rated digital asset is trading at $ 40,800. According to material indicators:
“So, it seems that the megabaleias started selling after that dump around 2 am UTC, and continued selling in the peaks. My guess is that they expected more disadvantages. They didn’t really participate in the rally back to 42k, which would help even more on that point ”.
In the most recent drop from $ 42,000 to $ 40,000, Fred explained that the smaller whales, which hold $ 100,000 to $ 1 million, have started to make a profit. He noticed:
“However, now, they started to buy again. Presumably to break the 42k resistance. Only this time, it looks like it was the normal whales ($ 100k – $ 1 million class) that started to profit. “
Considering that, sometimes, during the last week, the price of Bitcoin was negotiated high in Coinbase, it is clear that there is a great demand from the buyer coming from the USA
This suggests that there is a battle between normal whales making a profit and new buyers in the American market. The strong rejections of each new historic record also signal that whales may be profiting aggressively once Bitcoin reaches a new record
As such, it is important that the demand for U.S. Bitcoin is sustained in the short term. Otherwise, the high level of selling pressure on whales could cause the BTC to see a correction in the near future.
Where could Bitcoin go from here?
Bitcoin currently has an extremely strong technical momentum that continues to drive up the price. For this reason, traders are reluctant to sell it, but some have started to make profits.
In the short term, a concern for Bitcoin is the potential recovery of the US dollar. A broker pseudonym known as “Cantering Clark” identified the recovery of the US dollar and the decline of precious metals. He said:
“So the question is, with $ DXY finding a floor surprisingly, and the metals responding being detonated, does $ BTC hold up well?”
The US dollar index (DXY) is hovering at a support level on the monthly chart. Alternative stores of value, such as Bitcoin and gold, are valued against the dollar. Therefore, if the dollar starts to move upwards, the risk of a BTC correction may intensify.