Investors in Bitcoin (BTC) have recently been pleased as the digital currency managed to surpass the $72,000 mark on the markets in recent days. However, its positive momentum was short-lived, leading to a drop in BTC’s value.
Therefore, it is essential to delve deeper into the reasons behind Bitcoin’s current decline.
Exploring Bitcoin’s Drop Below the $70k Mark
The bullish momentum on October 27 led to significant gains for Bitcoin. By October 30, BTC’s value surged to $73.4k before stabilizing around $72k.
However, a reversal occurred over the past 24 hours. Market bears reclaimed control, causing a more than 4% decrease in Bitcoin’s price. At present, it is trading at $69,063.85.
One possible factor contributing to this recent correction is a substantial transfer. Whale Alerts reported that over 8000 BTC, valued at more than $567 million, were moved from an undisclosed wallet to Coinbase.
Large sell-offs of this nature typically trigger price drops. However, in this instance, the impact might be mitigated since the transfer was possibly from a cold CEX wallet, which tends to have minimal impact on prices.
Interestingly, a recent tweet from Lookonchain indicated that a whale seized the opportunity and purchased 550 BTC worth $38.68 million after the price dip.
Considering this, additional analysis was conducted to gauge the prevailing sentiment regarding buying activity over the past day.
Future Prospects for BTC
Based on the insights from Glassnode’s data, Bitcoin’s accumulation trend score stood at 0.88, suggesting a high buying pressure. Moreover, BTC’s NVT ratio experienced a significant decline recently, signaling that the asset may be undervalued, prompting increased accumulation during the price drop.
An examination of BTC’s daily chart by CryptoCrypto highlighted a notable decrease in Bitcoin’s Relative Strength Index (RSI) over the past few days.
Despite this, the MA cross indicator revealed a bullish trend with the 9-day MA well above the 21-day MA. Currently, BTC is approaching the support level at $68.59k. A successful test at this level could potentially propel BTC back towards $73k.