Whale clusters have revealed that Bitcoin needs to protect $44,214 to see the rally continuing.
Bitcoin (BTC) whale cluster data reveals that $44,214 is the near-term key the dominant cryptocurrency needs to protect.
As Cointelegraph announced, in the last 24 hours, Bitcoin saw a sell-off after hitting a new all-time high of about $48,000, with prices dropping almost 8 percent and falling to as low as $43,750 on Binance.
Why is this level important for more BTC upside?
Whale clusters are created when whales or high-net-value investors buy Bitcoin at a certain price level and do not move it.
These levels also serve as support or resistance levels, since whales are more likely to buy more BTC at the amount they keep or sell at breakeven.
Analysts at Whalemap said that losing the $44,214 support level would likely result in a drop to $39,843 in the short term.
But, if the level holds, then it would mean that it has become a new support area following the rally driven by Tesla purchasing $1.5 billion worth of BTC. The analysts said:
“Losing $44214 should open the door for BTC to visit $39843 as there are not many supports in between. For the time being though, $44214 should provide some support. There is also great demand at 38k prices so BTC should not be falling below that.”
There are many claims in favour of Bitcoin’s near-term bullish trajectory. First, according to Santiment analysts, there is a high number of active Bitcoin addresses and an exchange supply of Stablecoins.
The combination of these two metrics suggest an overall healthy uptrend for Bitcoin backed by strong fundamentals. They wrote:
“Both #Bitcoin’s active addresses and the exchange supply of #stablecoins like $USDT are remaining high, which is an encouraging sign that $BTC can rebound after today’s mild retrace.”
Additionally, the number of non-zero Bitcoin addresses is also at record highs, suggesting that an influx of new buyers is rushing into BTC.
— glassnode alerts (@glassnodealerts) February 11, 2021
Mass adoption is ongoing
Kyle Davies, co-founder of Three Arrows Capital, said that the cryptocurrency industry is experiencing mass adoption at the top of the favourable technological and fundamental factors.
In recent months, the demand in Bitcoin has seen a huge rise in the inflow of public corporations and institutional investors.
Via various investment instruments, such as the Grayscale Bitcoin Trust and the Coinbase Custody, institutional investors have purchased significant quantities of Bitcoin.
Davies said that the “new paradigm of decentralized money” has awaken, adding:
“We are witnessing mass adoption, right here right now. Stalwarts of the old world will convert, the crypto native will flourish. Awaken new paradigm of decentralized money. Don’t be scared.”
Meanwhile, the crypto market is experiencing a perfect storm of technological and fundamental factors complemented by a compelling macro narrative that is causing the valuation of both the main cryptocurrencies and the DeFi tokens to rally.
In the near future, based on the market structure of Bitcoin, a continuation of the rally is widely predicted, provided that the $44,214 level of the whale cluster does not split.
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