Bitcoin [BTC] fell 5.67% from the local high of $97.9k on January 14. After the sell-off on January 19, the asset entered a short-term retracement phase.
It has lost control of the local resistance at $94.5k, a level the bulls have been struggling to regain since mid-November. Yet it wasn’t all doom and gloom for the leading crypto.
On January 16, crypto analyst Maartun pointed out that 41,800 Bitcoins were sent to exchanges within 24 hours. It was a clear sign of it profit-taking under pressure at a time when the price was about to challenge the market based on short-term holding costs level at $99,470.
The analyst claimed that as long as BTC trades below the STH cost basis, the rally will be a bear market rally and no new bullish trend.
Bitcoin Resilience Assessment
In a recent report, AMBCrypto noted that the options market showed renewed optimism. The Put/Call ratio was 0.71, reflecting bullish positioning.
Despite the macro FUD, Bitcoin whales who bought in December with a cost basis of $90,000 – $92,000 did not capitulate. Institutional demand was strong, and ETF flows were strong over the past week, breaking a four-day positive streak on Monday.
Derivatives data also showed a bullish shift. The Buy/sell index moved from negative values on Monday, January 12, to a persistently positive zone by the end of the previous week.
Crypto analyst Axel Adler Jr stated that the average weekly derivatives flow balance was bullish. This shift created a continued influx of buyers, amplifying the upward moves and increasing their chances of continuation.
Has the recent sell-off affected the bulls’ plans?
Source: BTC/USDT on TradingView
The 4-hour chart showed that the swing structure was bullish in this time frame. BTC was facing a deep retracement and the 78.6% level at $91,154 was about to be tested.
The MFI was showing strong selling pressure and downward momentum at the time of writing, but there is hope for a bullish recovery if the $91.1k area is defended.
Final thoughts
- Selling pressure from short-term holders as Bitcoin surged toward $100,000 last week showed weak conviction.
- The average weekly derivative flow balance turned bullish, and the fourth-half time chart showed that recovery is possible.