September 25, 2023

Bitcoin (BTC): A Breach of This Support Might Benefit Short Sellers

  • Bitcoin saw a brief upside momentum.
  • However, the king crypto might break below $16,442.
  • Breakouts beyond the 23.6% Fibonacci mark of $16,766K will cancel the forecast.

Bitcoin has remained within $16.92K and $16.45K for more than ten days. BTC’s sideways market structure has the broad market stalling, limiting volume and volatility –double trouble for market participants. The crypto traded at $16,587 during this publication. The crypto might dip further, according to on-chain metrics and technical indicators.

Will $16,442 Support Hold?

Bitcoin rallied following the FOMC conference to hit the $18.4K mark – a 9% increase. Nonetheless, a price correction surfaced to clear all the acquired gains and pushed the crypto lower. Bitcoin has seen four massive price pullbacks since exploring the highs of $18.4K.

The initial one paused at $16,627 and encountered rejection near the 0.236 Fibonacci mark, which kick-started the 2nd correction phase. The 2nd fall settled at around $16,442.38, and the recovery attempt met rejection near $16,918.

This mark has materialized to a bearish block and catalyzed the 3rd dip, which paused at around 23.6% Fibonacci mark. While publishing this analysis, the 4th price correction phase had breached beneath the 23.6% Fibonacci zone and seemed ready to violate the previous support of $16,442.

The OBV remained negative, showing that BTC investors sold the asset more than buying, indicating amplified selling momentum. Moreover, the RSI (Relative Strength Index) drifted from the mean area and dipped, demonstrating eased buying momentum.

Thus, Bitcoin might fall under $16.442 & retest $16,766, offering targets for short selling. Nonetheless, breaking beyond the 23.6% FIB of $16,766 would cancel this narrative. That would witness bulls targeting the $16,918 bearish order block. However, BTC bulls should overpower the $16,627 hurdle to progress.

Declined Whale Transactions Trigger Massive Losses for Long-Term Holders

Santiment’s data shows Bitcoin whale transaction count remained lower, near December 2020 lows. Such developments make it challenging for Bitcoin to surge, considering that whale activity directly impacts price trends. Thus, Bitcoin holders may welcome the new year unhappy.

Moreover, long-term Bitcoin holders have seen losses throughout 2022, as the 365d MVRV indicated. The Market Value-Realized Value stayed inside the negative region this year. While writing this analysis, longer-term holders experienced more than 30% losses.

Continued whale transactions slump might mean extended losses for Bitcoin HODLers. Contrarily, increments in the whale transfer metric might trigger price reversals. Enthusiasts should beware that this month’s highest whale transaction count happened on December 13 (the FOMC announcement data).

A trend repeat will mean the next whale transfer uptick may surface during the coming FOMC conference in January next year (January 31 or February 1). Time will unravel everything.

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