Bitcoin price fell to a 40-day low of $40,700 on January 19, raising concerns of major liquidations if it loses the $40,000 support.
Since the highly anticipated verdict on spot ETF approval, Bitcoin (BTC) has seen sideways price action. Another sell-off on January 19th saw prices fall towards $40,000 for the first time since mid-December.
Miners acquired $482 million worth of BTC amid the market downturn
On January 19, Bitcoin price fell below $40,700 for the first time in 40 days after stabilizing in the $42,000-$43,000 range for much of the past week. However, on-chain data trends show that bullish miners have intervened to defend the key support level at $40,000.
Cryptoquant's Miner Reserve metric shows how many balances are currently held in wallets controlled by recognized mining companies and pools.
The chart below shows that Bitcoin miners increased their reserves by 12,058 BTC on January 19th alone.
Bitcoin (BTC) Miners Reserves vs. Price | Source: CryptoQuant
As shown above, miners increased their holdings by 12,058 BTC, worth approximately $494 million at current prices. The timing of this massive acquisition suggests that miners stepped in to stop the decline as prices began to fall towards $40,000.
Miners are influential players in any proof-of-work cryptocurrency ecosystem. This clear buying trend among miners could undermine retail investor confidence and prevent a panic sell-off.
Bullish futures traders are showing resilience
Furthermore, bullish traders in the Bitcoin derivatives markets also seem to be maintaining their optimism amid the BTC price decline. As of 12pm Eastern trading time on January 19th, the BTC price had fallen 7% within the daily period.
BTC open interest has held steady, barely falling 2% as it rose from $18.5 billion to $18 billion – this bias suggests widespread LONG covering maneuvers among derivatives traders.
Bitcoin (BTC) Open Interest vs. Price, January 19, 2024 | Source: Coinglass
Open Interest tracks the real-time value of all active derivative contracts for a crypto asset. If open interest remains stable during a price decline, as observed above, this suggests that traders holding LONG contracts are doubling their positions in hopes of a quick recovery in spot markets.
Instead of closing their positions as BTC prices fell, trading data shows that Bitcoin miners and bullish derivatives traders jumped in and invested millions to defend their positions.
BTC Price Prediction: Can Bitcoin Stay Above $40,000?
When BTC price fell below $41,000, it sparked concerns that a loss of $40,000 could trigger stop-loss orders and margin call orders. From an on-chain perspective, the $482 million acquisition could build enough demand from miners and derivatives traders defending their LONG positions to keep BTC above $40,000.
The IntoTheBlock In/Out of the Money price data further highlights that BTC has significant support in the $40,000 area.
Bitcoin (BTC) Price Prediction | Source: IntoTheBlock
The chart above shows that 679,910 current addresses purchased 313,000 BTC at the highest price of $40,313. If this buying wall remains stable, BTC price is likely to avoid another decline below $40,000 in the near term.
On the other hand, Bitcoin bulls could regain market control if the price can climb above the $45,000 level.
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