Bitcoin’s next move: Should you prepare for a drop to $56K?

  • Bitcoin’s next significant demand zone was around $56,000.
  • Demand slowed down, both from new ETFs and existing holders.

Bitcoin [BTC] continued to sell off, sinking more than 4% in the last 24 hours to trade in the $62,000 zone, according to CoinMarketCap. Trading volumes rose by nearly 5% to $45 billion during the period, suggesting high speculation from market participants.

Will the slump continue?

Interestingly, the latest dip was from a “major demand” zone, according to on-chain analytics firm IntoTheBlock. History showed that more than a million wallets had purchased BTC at an average price of $64,300, indicating that it served as a strong support.

But now that the bears have been able to breach this support, the next significant demand zone lied around $56,000. This meant that if accumulation doesn’t gain steam, BTC was at the risk of plunging to the aforementioned level.

Was Bitcoin getting purchased or…?

Well, a few smart investors were using the market downside to load their Bitcoin bags.

As per on-chain tracker Lookonchain, a whale bought as many as 244 Bitcoins, worth a whopping $15 million at press time, in the last two days. The wealthy player has acquired around 915 Bitcoins since December 2023, additional data revealed.

But was there a broader market accumulation trend?

As per AMBCrypto’s analysis of Santiment’s data, there was a lack of urgency amongst whale cohorts to stockpile Bitcoins.

While wallets holding between 1,000 – 10,000 coins barely showed an uptick, the cohort storing 10,000 – 100,000 coins liquidated their holdings over the week.

BItcoin whale accumulation

Source: Santiment

These findings were corroborated by Julio Moreno, Head of Research at CryptoQuant. With backing from data, he showed how Bitcoin’s demand has slowed down, both from new exchange-traded funds (ETFs) and existing holders.

Bitcoin demand accumulation

Source: CryptoQuant

Is your portfolio green? Check out the BTC Profit Calculator

See also  Crypto Market Analysis: September Signals Volatility, Santiment's Analysis of Bitcoin's Price Swings

Derivatives markets still bullish on BTC

These alarming developments sparked concerns of further downsides in Bitcoin’s price in the days to come.

Interestingly, speculative traders were not buying this narrative. According to AMBCrypto’s analysis of Coinglass’ data, the Longs/Shorts Ratio was still more than 1, implying that the majority of the futures traders were hopeful of a rebound.

Next: BONK: Explaining 40% weekly fall and if these indicators mean something

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