Bitcoin Encounters Selling Pressure: Can These Support Levels Prevent a Sharp Decline?
Bitcoin’s performance in the market is not quite aligning with previous expectations following a significant surge last month that propelled it to a new record peak, showing a 33.14% increase.
Currently, the 24-hour gain stands at a modest 0.78%, indicating a tilt towards more buying activity over selling. However, this upward momentum is not set in stone, as detailed by CryptoCrypto.
Decrease in BTC Supply on Exchanges Continues
Data from CryptoQuant illustrates an ongoing decrease in the availability of Bitcoin on cryptocurrency exchanges. The Exchange Reserve has dropped by 0.61% in the past 24 hours and by 1.53% over the past week.
A reduction in Exchange Reserve typically signals a lower circulating supply of BTC on exchanges, a factor that often supports price hikes due to scarcity.
This decline has contributed to BTC’s recent gains on the daily chart. Nevertheless, the sustainability of this upward trend remains speculative, with CryptoCrypto highlighting pivotal factors to monitor.
Growing Selling Pressure as BTC Reaches Supply Zone
According to analyst Ali, BTC finds itself at a crucial juncture as it enters a supply zone at $96,614.75, marked by substantial selling pressure, with sell orders totaling 296.8K BTC.
Should BTC witness a decline, Ali emphasized the significance of the next essential demand zone at $93,578.96, where buy orders amounting to 503.8K BTC from 666.94 addresses are concentrated.
Emphasizing on the importance of staying above this support level, Ali suggested that it is imperative to deter these holders from offloading their holdings.
While the presence of stronger buy orders at this level hints at its capacity to hold, the actual outcome will be dictated by the level of selling pressure exerted.
CryptoCrypto also highlighted a cautionary signal, noting a sharp increase in BTC inflows to exchanges, with 2,678 BTC transferred within the last 24 hours, thereby heightening the prospect of a price downturn.
Diminishing Retail Engagement
Retail investors, who significantly influence asset price actions, are exhibiting signs of reduced interest, evidenced by a notable 35.03% decline in the number of active addresses.
A drop in active addresses typically signifies decreased buying activity, potentially contributing to a forthcoming price drop for BTC, conceivably towards the previously mentioned demand zone.
With the current buy order volume and address activity at the demand zone remaining steady, the chance of a price reversal from that level still exists.