Key Points
- Short-term holders have sold large volumes of Bitcoin, while large investors wait for better entry points.
- Bitcoin’s buying ratio has reached a new high, suggesting potential buying opportunities.
Bitcoin’s [BTC] recent phase has seen a decrease of 4.43% in the past 24 hours, with the cryptocurrency now trading below $100,000. This has reduced its monthly gains to 4.94%.
If the bullish momentum continues, Bitcoin has the potential to exceed its previous all-time high and possibly reach $108,500 before trending upwards. Recovery may depend on large holders entering at key price levels despite bearish market conditions.
Short-term Holders and Bitcoin’s Decline
Analyst Jam Van Straten suggests that the recent downturn in Bitcoin’s value is primarily due to short-term holders who frequently trade the cryptocurrency. This group has collectively sold about 26,000 BTC, valued at $2.7 billion.
These sales include both losses and profits, indicating the volatility of their trading activity. Van Straten points out that large investors, or ‘whales’, are currently on the sidelines, holding significant liquidity as they await an optimal entry point.
This implies that these influential traders are unlikely to act until market conditions align with their strategies. Once whales re-enter the market, their buying activity could drive Bitcoin to recover and potentially trade higher.
Buying Momentum and Bitcoin
According to Santiment, discussions around buying Bitcoin’s recent dip have reached record-high levels, a sentiment last seen on the 12th of April 2024, eight months ago.
Since then, Bitcoin has surged by over 81%. If history repeats itself, the current sentiment could fuel a similar rally, pushing BTC into higher price regions beyond its current levels.
With this potential upside in view, whales are likely to resume purchases. If buying momentum remains strong, Bitcoin could trend even higher.
Further analysis by analyst Mister Crypto reveals that BTC is ready to trade above its previous highs, driven by the formation of a large liquidity cluster around the $108,500 level. Liquidity clusters act as magnets for price movements, as assets often gravitate toward these regions to clear out pending orders before continuing their trajectory.
This setup suggests that Bitcoin has a strong likelihood of regaining buyer interest, especially as bullish conversations continue to dominate the market.