The price of Bitcoin ( BTC ) short of money above $40,000 upon Feb. 6 for the first time in 23 days. But on this occasion, the market sentiment is a lot calmer with a less overheated derivatives market.
The particular combination of a less crowded Bitcoin futures market, the particular selling pressure from whales peaking, and a fast recuperation could help BTC stabilize over $40, 000 this time.
Bitcoin recovers quickly after whales finish promoting
On Jan. 29, a pseudonymous Bitcoin researcher and analyst called “Material Scientist” said that “mega whale” order flow arrived at an all-time high.
This means that the marketing pressure coming from whales dealing with $1 million to $10 million orders reached a record-high. The analyst said during the time:
“Whales bought back almost everything they had offered since $40k, and mega-whales are about to make a new ATH on their orderflow. Downtrend is over, IMO. New ATH soon, don’t miss this! ”
If the price of Bitcoin establishes $40, 000 like a new support area, it might establish a highly positive short-term price trend for BTC.
It would mean that BTC can now rally in the direction of its all-time high without the massive selling pressure coming from major whales and high-net-worth investors.
In the near term, for Bitcoin to maintain its bullish construction, it would need to protect two key support levels: $40, 000 and $37, 834.
Meanwhile, according to the analysts at Whalemap, the data analytics platform that will tracks whale data, there is a confluence of whale helps at $37, 834 and $36, 290.
If Bitcoin breaks down from $40, 000, these two assistance areas would be critical to protect. Below these two levels may likely result in a short-term bearish tendency. The analysts wrote :
“Confluence of whale supports at $37834 –> $36290. A new cluster formed last night in that area too. This will give BTC a nice base to take off from if we ever get there. Otherwise $39843 should provide some help too. ”
What comes next?
Later on, some traders anticipate Bitcoin to surge beyond $60, 000 with the momentum from the ongoing rally.
Scott Melker, a cryptocurrency trader, said there will be pullbacks, but Bitcoin would likely reach $63, 000 following the breakout. He said :
“There will be pullbacks, maybe even to retest the top of the flag as support. But technically this is a confirmed breakout that should take $BTC to 63K eventually. Disclaimer – patterns rarely reach their targets, but the rules are the rules. ”
Bitcoin technically broke out of the bull flag when it surpassed $38, 000 on Feb. 4. Considering that Bitcoin is looking stronger than the last time it broke $40, 000 a month ago, there is adequate momentum to carry it past $50, 000 this time around.
A potential catalyst in the near term could be Guggenheim potentially confirming its investment in Bitcoin after securing the rights to invest in the Grayscale Bitcoin Trust in February.