BTC Price Dips Below $58K, but Whale Activity Hints at a Market Rebound
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The price of Bitcoin had a 10.82% decline last week, which undermined the previous week’s recovery. With a 2.81% decline and a plunge below the $58,000 barrier, the week came to a gloomy end.
Amid the increased selling, the crypto market registered a staggering $138 million worth of liquidations in long-side positions. As the supply inflow hits the fan, will the $57,000 support crack under pressure? Read this analysis to know more!
Introducing the Sellers
Apart from the retailers and short-term holders (weak hands), there are strong selling forces at play in the crypto market. Among the top sellers, the US Government and the MtGox exchanges are the top names.
From the repayment scheme, MtGox has repaid 95,958 $BTC ($6.07B) in July and August. However, the exchange still holds 44,898 $BTC ($2.65B). This accounts for almost 33% of the initial holding.
Further, the US Government sits on 203,650 confiscated $BTC ($12B). Despite the ongoing Presidential race for being pro-crypto, this can be a big supply inflow if the tides shift.
Bitcoin (BTC) Price Performance
In the 4-hour chart, the Bitcoin price reveals a massive crash witnessed over the weekend. With a 2.81% drop on Sunday, the BTC price is now back under the $58,000 level.
Currently trading at $57,673, the BTC price action reveals a falling wedge pattern as the price range constricts. Furthermore, the sudden increase in bearish influence results in the debt cross of 50 and 200 EMA in the 4-hour chart.
As the BTC price tests the $57,000 support level, the possibility of a consolidation range with the overhead ceiling at $61,500 is increasing. This is supported by the bullish divergence in the RSI line that projects a potential bull cycle with a short-term resistance trendline breakout.
Based on the Fibonacci levels, the support levels below the $57,000 mark are $55,647 and $51,335. On the upside, the resistance levels above the ceiling of $61,500 are at $65,700 and $69,600.
Whales To The Rescue!
Despite the sell-off, the number of Bitcoin whales is increasing in the crypto market. An increase of 283 additional wallets holding at least 100 BTC in just a month reveals an underground buying spree. Based on the Santiment data, currently, there are 16,120 wallets on the network holding at least 100 Bitcoins, a 17-month high.
In support of the rally, the long-term holders now control 75% of the total supply by increasing their supply by 262,000 $BTC in Aug. Thus, the total now stands at 14.82 million $BTC.
