journalist
Posted: September 9, 2023
- Assessing the possibility of a renewed increase in selling pressure if Bitcoin forms a death cross.
- Bitcoin whales have contributed to BTC’s calm and bearish trend, but have recently eased the selling pressure.
Bitcoin is currently in one of its longest crypto winters, which is expected to end soon. So far we have seen some signs that the current bear market may be nearing its end.
Read Bitcoins [BTC] Price prediction 2023-24
Bitcoin’s current performance is in stark contrast to its performance 12 months ago. In fact, one could argue that given its current premium, Bitcoin may be in the early stages of its next bull market.
Perhaps even more compelling is the observation that Bitcoin addresses are growing at a rate of around 527,000 addresses per day.
As #Bitcoin continues to hover around the $26,000 mark, an interesting trend is emerging. Around 527,000 new $BTC addresses are created every day, which is a new annual high!
For those unfamiliar, this suggests that more people are showing interest in #BTC even as the price has increased… pic.twitter.com/7O0NcoJjMz
— Ali (@ali_charts) September 8, 2023
The above address growth underlines the return of confidence in the market and its growing demand. This is arguably a healthy sign for Bitcoin’s long-term prospects. But does that mean the worst is over?
Bitcoin’s death cross pattern is emerging
Past events that triggered a market crash often surprise the market. We therefore may not know when a black swan event will occur. Still, there are cases where the market offers a degree of predictability. One such case is when Bitcoin forms a death cross where the 50-day moving average crosses below the 200-day moving average.
Bitcoin was on the verge of forming a death cross at the time of writing. This could lead to a resurgence of short-term selling pressure. The cryptocurrency struggled to secure momentum and move out of its current levels.
The death cross pattern could initiate capitulation and potentially lead to a price drop below the $25,000 price level. The magnitude of the outcome depends on the level of selling pressure.
Source: TradingView
Perhaps an assessment of whale activity would provide more insight into what to expect. Whales often have foresight about market events and therefore take action before the rest of the market catches up. Significant outflows from whale addresses holding more than 1,000 BTC have been observed over the past four weeks.
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Bitcoin addresses in the 1,000 and 10,000 BTC and above range are currently within their monthly range. Those in the 10,000 BTC range and above have settled at a three-month low. However, addresses with at least 1,000 BTC were still high compared to their three-month lows.
Source: Glassnode
The fact that whales are not currently dumping more coins as the death cross forms could be a good sign. Possibly an indicator that the expected downtrend may not be that severe. However, caution is still the order of the day, especially now that the Fed’s next rate hike is approaching.
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