After reaching the $30,000 mark for the first time since June 2022, Bitcoin plummeted back into the red. However, most on-chain indicators are green.
Bitcoin has dropped 10% over the past week, but a rebound above $30,000 seems more likely than a drop below $25,000.
With investor confidence starting to deteriorate, Bitcoin is likely to grab market share from altcoins.
Investors Expecting the Worst
The ???? US banking crisis has revived crypto investors’ hopes. However, since Bitcoin broke the $22,000 mark, investor confidence has deteriorated, causing weighted sentiment to fall to its lowest level since March 2.
As a reminder, weighted sentiment is an indicator that represents the ratio of positive and negative mentions of a crypto asset on social media.
Between April 11 and 24, Bitcoin’s weighted sentiment dropped from 1.53 to -0.70.
This decline in social sentiment, combined with an increase in selling pressure, can lead to a temporary drop in Bitcoin price. However, once investor sentiment reaches a low, we could see a decrease in selling pressure and the start of a new bullish cycle.
According to historical data, Bitcoin price tends to move in the opposite direction of ???? investor sentiment. If history repeats itself, the asset could experience a strong surge in the coming days.
What Are Bitcoin Whales Doing?
Second good news: some whales whose wallets are strongly correlated with BTC price movements seem to be entering another accumulation phase.
Indeed, Bitcoin’s rejection by its $30,000 resistance triggered a massive sell-off last week. However, on-chain data reveals that whales holding 100 to 1,000 BTC took the opportunity to buy Bitcoin on the dip.
As shown in the chart below, these whales added 20,000 BTC to their ???? wallets between April 16 and 24. At current prices, this is equivalent to $540 million. When large institutional investors buy such large amounts in a very short period, the market tends to return to optimism.
Given historical data, these Bitcoin whales buy just before major bullish movements. Thus, we expect Bitcoin price to pick up in the coming days.
Towards a $32,000 Bitcoin?
Thirdly, data from IntoTheBlock shows that it is unlikely for Bitcoin to fall below $27,000.
Currently, the nearest resistance zone is at a price level of $27,500, where 61,000 addresses bought 13,500 BTC. This zone is much less significant than the $27,100 support, where 252,000 addresses bought 389,000 BTC.
To start a bullish rally, Bitcoin must pass its second resistance zone of $28,350. Indeed, 1.98 million holders bought 756,000 BTC at this price level, making it a very strong resistance. Therefore, if BTC manages to exceed this level, its price could rise to $32,000.
However, if the asset falls below $27,000, it would be very difficult to imagine a bullish scenario in the short term. However, as explained earlier, it is unlikely for BTC to drop so low.
Moral of the story: let’s be optimistic, but not too much!
Disclaimer
Disclaimer: In accordance with The Trust Project’s guidelines, this price analysis article is intended for informational purposes only and should not be considered as financial or investment advice. BeInCrypto is committed to providing accurate and unbiased information, but market conditions may change without notice. Always do your own research and consult a financial professional before making any investment decisions.
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