Bitcoin’s price: Will these metrics be decisive this week?

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The direction in which Bitcoin’s price fluctuates is determined by whale activity. This may not be totally accurate, but in the case of a flash collapse or price collapse, this has the most impact on pricing. The on-chain metrics data used to calculate supports and resistances indicate that Bitcoin’s price may continue to fall below $30000. The falling exchange reserves, on the other hand, reinforce the positive narrative. According to CryptoQuant statistics, Bitcoin exchange reserves have fallen even lower this week.

 

Large wallet inflows suggest bullish future for Bitcoin's price

BTC Exchange Flows | Source: CryptoQuant

This reduction in exchange reserves lends credence to the hypothesis that the price will breach crucial resistance at $40000 in the coming weeks. Several purchases were made and accumulation happened below $38000 during the last downturn, which is why it is considered resistance.

Major wallet inflows have steadily declined in the last two weeks, and with the reduction in accumulation by large investors, the selling pressure on Bitcoin may intensify. Selling pressure has been absorbed by current volatility and demand across exchanges. Furthermore, falling dominance and transaction volume across exchanges indicate a possible reduction in demand. The bearish price action may pave the way for an altcoin rally, but it is a blow to short-term profitability for portfolios that own more than 10% Bitcoin.

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With the help of significant liquidity and volatility across exchanges, Bitcoin’s price has rebounded from low profitability and slumps.¬†Similarly, the short-term Net unrealized profit loss for Bitcoin showed that the current state is that of capitulation.

Large wallet inflows suggest bullish future for Bitcoin's price

Bitcoin short-term NUPL | Source: Glassnode

Historically, based on the chart’s patterns, surrender was followed by a rapid rebound and rebound, which occurred numerous times in 2011, 2014, and 2018. On the chart, the present capitulation is comparable to that seen in 2019, and it was followed by a price rise.

Large wallet inflows provide a gloomy story when alone; nevertheless, when paired with other data, traders remain mostly positive on Bitcoin’s price in the immediate term. The drop provided a chance for individual and institutional traders to accumulate, lowering the average cost of obtaining Bitcoin and improving profitability. HODLers adopt this technique as well, accumulating during repeated drops.

 

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