- Assessing the possibility of sell pressure resurgence as Bitcoin forms death cross.
- Bitcoin whales have been contributing to BTC’s dormancy and downside but have recently eased off sell pressure.
Bitcoin is currently in one of its longest crypto winters, which is expected to end sometime soon. So far we have seen some signs that the current bear market could be approaching its tail end.
Read Bitcoin’s [BTC] price prediction 2023-24
Bitcoin’s current performance is a stark contrast compared to its performance 12 months ago. In fact, one could argue that Bitcoin might be at the early stages of its next bull market considering its current premium.
Perhaps even more convincing is the observation that Bitcoin addresses have been growing at a rate of around 527,000 addresses per day.
As #Bitcoin continues to fluctuate around $26,000, an interesting trend emerges. Around 527,000 new $BTC addresses are being created daily, representing a new yearly high!
For those unfamiliar, this suggests more people are showing interest in #BTC, even if its price has seen… pic.twitter.com/7O0NcoJjMz
— Ali (@ali_charts) September 8, 2023
The above address growth underscores the return of confidence in the market and its growing demand. This is arguably a healthy sign for Bitcoin’s long-term outlook. But does it mean that the worst is over?
Bitcoin’s death cross pattern in the making
Past events that have triggered a market crash often catch the market by surprise. We might thus not know when a black swan event is bound to occur. Nevertheless, there are instances where the market offers some degree of predictability. One such instance is when Bitcoin forms a death cross where the 50-day moving average crosses below the 200-day moving average.
Bitcoin, at the time of writing, was close to forming a death cross. This could trigger a resurgence of short-term sell pressure. The cryptocurrency has been struggling to secure momentum to exit its current level.
The death cross pattern could usher in capitulation and possibly lead to price slippage below the $25,000 price level. The extent of the outcome will depend on the amount of selling pressure.
Source: TradingView
Perhaps an assessment of whale activity would offer more insights into what to expect. Whales often have foresight over market events and hence, make moves before the rest of the market catches up. In the last four weeks, considerable outflows were observed from whale addresses holding over 1,000 BTC.
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Bitcoin addresses in the 1,000 and 10,000 BTC and above range are currently within their monthly range. Those in the 10,000 BTC and above bracket have leveled out at a three-month low. However, addresses holding at least 1,000 BTC were still at a premium as compared to their three-month lows.
Source: Glassnode
The fact that whales are currently not offloading more coins as the death cross is forming could be a good sign. Perhaps an indicator that the expected downside may not be as severe. Nevertheless, caution is still the word of the day especially now that the FED’s next interest rate reversal draws near.
