Bitcoin price fell after failing to sustain bullish strength above $30,000. Some analysts had predicted such an outcome, even predicting a sharp drop. But if these predictions are correct, will prices fall below $20,000?
The latest alert from Glassnode shows that the active Bitcoin supply over the past 2-3 years has just surged to a 2-year high.
📈 #bitcoin $bitcoin Last active 2y-3y (1d MA) supply just hit a 2-year high of 2,654,292,828 BTC
View metrics:https://t.co/ov1FrjgNQz pic.twitter.com/fsYCSFvLh8
– glassnode alerts (@glassnodealerts) April 23, 2023
This means that many individuals holding BTC are starting to move funds. Such results suggest that many of them are preparing to sell in anticipation of higher selling pressure.
Bearish expectations also reflect the current state of the market. BTC just wrapped up a bearish week characterized by whale outflows.
Based on addresses with balances equal to or greater than 1,000 BTC, whales have been reducing their balances since mid-April.
Source: Glassnode
Meanwhile, liquidations of long futures contracts have increased since mid-April, but have decreased since April 21. Why? The initial surge in liquidations may have created more selling pressure as leveraged traders were forced to sell. However, the decline means that the selling pressure has slowed down.
BTC inflows to exchanges have been dominating outflows since mid-month. Outflows from exchanges also increased, likely as investors bought on dips. Traffic has slowed for the past two days for both.
Source: Glassnode
Interestingly, the latest exchange flow data shows slightly higher BTC outflows than inflows. This shows that demand is starting to outweigh selling pressure. But is this reflected in price action?
Bitcoin Price Action
Prices at $27,768 at the time of writing are hovering above the 50-day moving average, which could be a psychological buying zone. But is a strong recovery likely at this point? Yes, but long-term downside risks cannot be ruled out.
BTC is trading within support and resistance. The most recent decline since mid-April occurred after the price retested the ascending resistance line, as shown in the chart below.
Source: TradingView
Therefore, investors should watch for a strong recovery in demand for the 50-day moving average, which could signal a strong recovery. Weak demand will pave the way for prolonged selling pressure.
The latter scenario could encourage more selling and eventually a push into the rising support zone. Such an outcome would lead to a retest of the next key support around the $22,900 price range.
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Ming Ying
According to AMBCrypto
