Journalist
Posted:
- Assessment of the possibility of selling pressure resurgence as Bitcoin forms a death cross.
- Bitcoin whales have contributed to BTC’s calm and downside, but have recently eased 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 is nearing its end.
Read Bitcoin’s [BTC] price forecast 2023-24
Bitcoin’s current performance is in stark contrast to its performance twelve months ago. You could even argue that Bitcoin might be in the early stages of its next bull market given its current premium.
Perhaps even more convincing is the observation that Bitcoin addresses have been growing by about 527,000 addresses per day.
If #Bitcoin continues to fluctuate around $26,000, an interesting trend emerges. About 527,000 new $BTC Addresses are being created daily, representing a new yearly high!
For those unfamiliar with it, this suggests more people are taking an interest in #BTCeven considering the price of it… pic.twitter.com/7O0NcoJjMz
— Ali (@ali_charts) September 8, 2023
The growth mentioned above underlines the recovery of confidence in the market and growing demand. This is perhaps a healthy sign for Bitcoin’s long-term prospects. But does this mean the worst is over?
Bitcoin’s death cross pattern in the making
Past events that led to a market crash often take the market by surprise. So we may not know when a black swan will occur. Nevertheless, there are cases where the market offers some degree of predictability. An example of this is when Bitcoin forms a death cross where the 50-day moving average falls below the 200-day moving average.
Bitcoin was on the verge of forming a cross of death at the time of writing. This could lead to a resurgence of selling pressure in the near term. The cryptocurrency has struggled to secure momentum to exit current levels.
The death cross pattern could herald capitulation and possibly lead to a price drop below the USD 25,000 price level. The size of the outcome will depend on the amount of selling pressure.
Source: TradingView
Perhaps an assessment of whale activity would provide more insight into what to expect. Whales often have foresight to market events and therefore take steps before the rest of the market catches up. In the past four weeks, significant outflows have been observed from whale addresses with more than 1,000 BTC.
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Bitcoin addresses in the range of 1,000 and 10,000 BTC and above are currently within their monthly range. Those in the bracket of 10,000 BTC and above have stabilized at the lowest level in three months. However, addresses with at least 1,000 BTC were still more expensive compared to their three-month lows.
Source: Glassnode
The fact that whales are currently no longer unloading coins as the cross of the dead is forming could be a good sign. Perhaps an indication that the expected disadvantage may not be so serious. Nevertheless, caution is still the word of the day, especially as the FED’s next rate hike approaches.