Sale and frantic trade will continue as exchanges will see more BTC join than exit.
Bitcoin (BTC) plunged to $30,000 on Jan. 26 after higher amounts evaporated and fresh miner outflows continued to limit market activity.
BTC price rally turns sour
Data from Tradingview showed the largest cryptocurrency abruptly U-turn as it neared $35,000 in early week trading.
At the time of publication, BTC/USD stood close to $31,000, a 24-hour loss of more than 5%.
A mixture of causes, all of which indicate a short-term profit-taking mission by market participants, came on Monday to prevent bulls from raising rates.
Miners likely still selling
Data reveals that mine outflows—funds leaving mining pools—continued to spike this week. As Cointelegraph noted, last week’s price plunge came as the largest pool in F2Pool saw multiple days of big outflows. This time, however, smaller miners took the lead.
Outflows do not explicitly mean that miners are selling BTC, but prove that mined coins are going, probably to locations where they would be part of an exchange.
According to the CryptoQuant on-chain analytics resource, overall outflows were down this week compared to last but still higher than in recent months.
Exchange flows positive for Bitcoin
Looking at exchanges, traders looked anxious about market strength. In comparison to the actions during Bitcoin’s vertical price growth at the turn of the year, net trading flows have been positive in recent days.
Compiled by the Glassnode on-line monitoring resource, data tracking major exchanges revealed that about $108 million more was deposited than withdrawn on Monday.
Conversely, stocks of the main altcoin Ether (ETH) on trading platforms declined by $47 million, while Tether (USDT) rose by $65 million.
Removal of coins from markets means that the investors have no intention of trading or selling them, instead of putting them back in hot or cold storage wallets.
Coins are highly active
Bitcoin addresses are more active than ever, though BTC holdings have been moving in recent days.
Bitcoin Days Destroyed, which compares the sum of each exchange on the Bitcoin network against how long the coins involved last passed, hit this week’s three-month lows.
Glassnode followed a steep fall in the metric in January, coinciding with a trade frenzy on the heels of Bitcoin touching an all-time high of $42,000.
At the same time, wallet numbers themselves passed 1.24 million as of Jan. 8, the latest date for which data is available.
Resistance is in…
A glance at the spot market on Tuesday highlighted multiple resistance levels on BTC/USD, with sellers lined up at $1,000 increments beginning at $35,000.
So far, bulls have failed to tackle any of these, with support likewise in place at each $1,000 level until $27,000.
…And greed is out
Finally, after floating at record lows in Q4 2020, a classic index of market confidence has returned to October levels in recent days only to recover to 71.
The Crypto Fear & Greed Index, which uses a basket of variables to determine whether investors themselves can cause Bitcoin to boom or bust, switched “extreme greed” to a reasonably usual “greed.”
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