Bitcoin, the leading cryptocurrency, is currently experiencing a reversal in its recent gains. With the possibility of a more significant retracement looming, some analysts suggest that the price could potentially fall back to the $30,000 mark. This article will explore the current state of Bitcoin and discuss the factors contributing to its uncertain future.
As of now, Bitcoin is trading at $40,950, reflecting a 2% loss in the past 24 hours. On a weekly chart, the cryptocurrency has seen a 3% decline. Interestingly, all top 10 tokens by market cap have witnessed a similar decline, except for Avalanche (AVAX). The recent rejection of Bitcoin from the critical resistance level at $43,500 has raised concerns among investors.
According to pseudonymous analysts, a notable player strategically placed a “substantial resistance block” as Bitcoin’s price dropped to its current levels. This selling order amounts to 1,562 BTC, equivalent to approximately $7 million. Furthermore, the chart reveals thick support for Bitcoin as the bullish momentum starts to fade. Although the price might slow down, the $40,000 range could potentially act as crucial support for a potential bounce.
Despite the belief that the market can withstand the spike in selling pressure, crypto analytics firm Material Indicators suggests that Bitcoin is losing support from major players. Over the weekend, players with selling orders above $1 million chose to “dump” their positions. The firm had previously warned traders about this scenario, arguing that the recent bullish price action was a strategy to draw liquidity from retail investors. Once these smaller players entered the market, whales initiated the distribution of their coins by selling them during the rally. As a result, Material Indicators proposed a potential local top for Bitcoin at $45,000.
Keith Alan, a senior analyst at Material Indicators, expressed his views on the current price action, stating that although the situation may appear dire for bulls, he does not expect a straightforward downward trajectory. Instead, he believes that the market will eventually shift towards accumulation, and lower prices will pave the way for this transition. Alan advises patience and emphasizes the importance of observing how things develop from this point forward.
Bitcoin’s future remains uncertain as it experiences a retracement in its recent gains. With the potential for a more significant price decline, investors must closely monitor the market. It is crucial to conduct thorough research and exercise caution when making any investment decisions. While the current state of Bitcoin may seem discouraging for bulls, it is important to remember that market trends are rarely linear, and patience is key to navigating the volatile world of cryptocurrencies.