The recent slide in price of Bitcoin below the $60,000 threshold, followed by a subsequent drop below $50,000, might finally be showing signs of reversal, as suggested by the newest buying trends. These trends indicate a robust accumulation phase amongst large-scale investors, commonly often known as whales, who’ve been capitalizing on the value dip to bolster their crypto holdings.
Related Reading
As such, Bitcoin addresses have collectively withdrawn over $1.7 billion value of Bitcoin from various exchanges, marking the biggest weekly outflow in greater than a 12 months.
Accumulation Trend Amongst Bitcoin Holders
In keeping with on-chain data from IntoTheBlock, Bitcoin addresses have been steadily accumulating the coin prior to now week. This data is highlighted through the analytic platform’s netflow data, which is crucial in forecasting an upcoming price uptick or downtrend for cryptocurrencies. The information highlights a big shift, showing that outflows from exchanges have substantially outpaced inflows, with a staggering $1.7 billion more value of BTC being withdrawn from exchanges than deposited.
BTC recorded a whopping $1.7B net outflows from exchanges prior to now week, the biggest amount in over one 12 months.
This points to large whales accumulating through the recent downturn pic.twitter.com/m4INbZmKmB
— IntoTheBlock (@intotheblock) August 9, 2024
Such outflow is often interpreted as an indication that investors are selecting to carry onto their Bitcoin for the long run, which in turn reduces the quantity of BTC available on the market on exchanges.
What Does This Mean For Price?
Recent dynamics in the broader world of investments and increased volatility saw Bitcoin falling below $50,000 again last week. Interestingly, this drastic price drop marked the primary time Bitcoin traded below $50,000 in six months. Nonetheless, be that as it could, the value decline gave many crypto believers a probability to build up more BTC at a six-month low. This created buying pressure amongst some traders, which in turn helped to prop up the value of BTC and helped to forestall further declines.
Bitcoin is now trading at $61,228. Chart: TradingView
A discount in Bitcoin available on exchanges can have significant implications for the market. With fewer coins available on the market, buying pressure may increase, potentially driving up prices as demand stays regular or grows. On the time of writing, Bitcoin is trading at $60,989, having established support at $60,000.
Considering the prevailing bullish sentiment, this buying pressure may as well be the momentum that pushes the Bitcoin price to the difficult $70,000 price level. Nonetheless, the journey to $70,000 presents 4 different resistance levels at $63,730, $65,510, $67,350, and $69,150.
The buying pressure continues to linger on in line with the overall flow to and from exchanges. The full flow data shows a negative 61.9% and 12.27% prior to now 24 hours and seven-day timeframes, respectively.
Related Reading
Nonetheless, Bitcoin is just not out of the woods yet, because the exchange on-chain market depth shows there are still more sellers than buyers. On the time of writing, sellers have placed sell orders of 31,458 BTC at a mean price of $61,267 on various crypto exchanges. Meanwhile, buyers have placed buy orders for less than 27,734 BTC at a mean price of $61,263.
Featured image from Pexels, chart from TradingView