Bitcoin (BTC) has faced challenges despite a short-lived rebound, with its price sliding below $55,000. Recent data indicates that an institutional investor deposited a substantial amount of BTC, raising concerns of a potential sell-off. Does this development signal an impending price correction for BTC in the near future?
Is there a trend of BTC sell-offs among investors?
Last week, Bitcoin, alongside most cryptocurrencies, experienced a decline with its price dropping by approximately 8%. The downward price trend persisted over the past 24 hours, culminating in a further dip of over 2%. As of the latest update, BTC was trading at $54,284.69, holding a market capitalization exceeding $1 trillion.
During this period, a significant investor executed a considerable sell-off of BTC. Specifically, Galaxy Digital transferred 1,458 BTC valued at $78.5 million to Coinbase Prime. Insights from Lookonchain indicated that large holders, commonly referred to as whales, have begun selling BTC, typically indicating an anticipation of a downward price movement.
Consequently, it is crucial to analyze additional data sets to gauge the escalating selling pressure on BTC.
According to CryptoCrypto’s examination of CryptoQuant’s information, Bitcoin’s exchange reserves recently surged, reflecting heightened selling pressures on the cryptocurrency.
Simultaneously, at the time of reporting, both BTC’s Coinbase Premium and Funds Premium displayed red indicators, signaling an overwhelming selling sentiment prevalent among U.S. and institutional investors.
Insights from Market Indicators
Further assessment was conducted on the cryptocurrency’s metrics to identify potential indications of an impending price correction.
Based on an evaluation of Glassnode’s data, BTC’s NVT ratio exhibited a decline, typically suggestive of an undervalued asset poised for a price upswing.
Furthermore, BTC’s aSORP displayed a green signal, indicating an increased number of investors selling at a loss. During a bearish market period, this can point towards a potential market bottom.
Additionally, the binary CDD metric suggested that the movement of long-term holders over the previous week was below average, implying a motivation to retain their coins, which may be viewed as a bullish signal.
A detailed review of the cryptocurrency’s daily chart revealed BTC testing a support level and touching the lower Bollinger Bands threshold, historically correlating with price upsurges.
Finally, both the Relative Strength Index (RSI) and Chaikin Money Flow (CMF) displayed positive increments, further indicating a potential forthcoming price hike.