Is the bull run in danger as Bitcoin bulls fight against miners’ $128 million move?
Bitcoin’s recent performance has raised concerns among its investors as the world’s largest cryptocurrency struggles to maintain its upward trajectory. While the currency recently reached a 12-month high just above $31,000, it is now facing potential profit-taking as miners indicate a significant transfer of $128 million.
Bitcoin Bulls Brace For Impact
According to Yan Allemann, co-founder of Glassnode, the miners’ transfer could create significant selling pressure in the market. This could create obstacles for the current bull run, which has already seen Bitcoin struggle to stay above the important $30,000 support level.
Adding to the uncertainty is the fact that Bollinger Bands, a technical analysis tool used to measure volatility, remain tight despite the low volatility. This has previously led to sudden market movements, which could further complicate matters for Bitcoin bulls.
The support at $30,000 is crucial for the revival of the upward trend, and investors are anxiously watching to see how the market reacts to the miners’ transfer. While Bitcoin has faced similar challenges in the past and managed to overcome them, the current situation is causing concern among market observers.
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Furthermore, Bitcoin’s current price stagnation is reflected in its Average Directional Index (ADX) on the daily chart, which is expected to decline.
This ADX movement suggests that Bitcoin’s trend for the next 10 days could be downward. This development raises the possibility that Bitcoin may either consolidate for the next week and a half, revisit the $29,600 support level, or even drop further to the $28,300 level if the downward movement persists.
Either way, it has been common for Bitcoin throughout the year to experience periods of correction or consolidation before embarking on another upward trend. The current ADX movement and potential downward trend are no exception to this pattern, as seen in the chart above.
As Bitcoin corrects or consolidates, the liquidity of long positions taken at these levels is likely to be absorbed. This is a natural part of market cycles, and it is not uncommon for Bitcoin to experience this type of price action.
Once the correction or consolidation phase passes and the liquidity of late long positions is absorbed, Bitcoin may be poised to begin another upward trend. This could potentially result in a 6,000-point upward trend, as seen in previous cycles.
BTC Faces Further Decline
Yan Allemann also highlighted other technical indicators that suggest a short-term reversal in Bitcoin’s price. The Relative Strength Index (RSI) reached a peak of 72.92 over the weekend, which is within the territory of overbought conditions. The RSI has since remained at high and low levels, indicating a possible decrease in buying pressure.
Furthermore, the double-top pattern and the Moving Average Convergence Divergence (MACD) also suggest an imminent short-term reversal in Bitcoin’s price. The MACD being overbought, along with the RSI at high levels, further supports this likelihood.
However, there are also positive indicators for Bitcoin’s price. The funding rates remain positive, reflecting bullish sentiment among investors. Additionally, Bitcoin mining stocks have been rising, suggesting a potential catalyst for the next major move in Bitcoin’s price.
Currently, BTC is trading at $30,500, up by 0.5% in the last 24 hours but failing to surpass the $31,000 mark.
Featured image from Unsplash, chart from TradingView.com