Recent price action indicates that BTC price was unable to hold above $90K levels, reversing on broader distribution.
Bitcoin’s large investor wallets sent clear signals of distribution with 100-1,000 BTC accounts dumping 50,625 BTC valued at $4.07 Billion and 10-100 BTC accounts dumping 7,062 BTC valued at $567.1 Million in a period of seven days.
Historically, this type of sale has had short-term weakness accompanying it, which has typically translated into price retracements.
If this selling pressure continues, BTC would fall to $80K, a major support level.
The reverse can occur, though, when accumulation catches up. While the same patterns of distribution were going on in March 2023, Bitcoin was range-bound before reclaiming ground.
If significant wallets regain over 21.5% of market share, BTC would stabilize and continue higher.
In the meantime, Bitcoin’s fate will depend on whether or not whales continue selling or start to reaccumulate at significant levels of support.
BTC Price: The Probability of a Bear Market
More analysis shows that the Bitcoin bull rally is walking on thin ice as the prices touch 21 EMA and 50 EMA support levels.
Breaking below that will enhance the possibility of a bear trend highly, but staying above it preserves the bullish configuration.
Currently, BTC is trading at just under $65K, slightly above the 21 EMA.
During prior cycles, dropping below this level has seen skewed bottoms, like when BTC had fallen below the 50 EMA of $42K in April 2022, and that resulted in a multi-month sell-off.
If BTC price is unable to sustain above $80K-$90K, then targets on the downside would be $70K, $64K and even $58K in the event of loss of momentum.
A 50 EMA breakdown, as in October 2023, could take BTC down to $75K and beyond.
The MACD is bearish currently, but further selling pressure would confirm more bearishness.
Bitcoin’s Market Value to Realized Value
However, Bitcoin’s MVRV also signaled the market to be oversold, the same as in previous cycles when declining holder profits reversed.
At 1.9, MVRV is signaling Bitcoin is nearly undervalued like in May 2021, June 2022, and January 2023 before humongous recoveries ensued.
Pitting 2024 against 2021, Trump mania and mega market frenzy pushed the value of Bitcoin to more than $82.4K, but will it be sustained?
In 2021, MVRV soared above 4.0, and that resulted in profit-taking and a bear cycle. If history is to rhyme again, BTC price may see corrections.
But breakdown in 2022-fashion will be extremely unlikely if MVRV falls below 1.0, the former bear market level.
If MVRV reverses at 1.5-1.7, BTC price can consolidate before the next up leg. A breakdown below $60K will establish bear momentum, but further longer-term spikes above 2.5 can signal a new bullish leg.
