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Bitcoin’s drop below $54,000 is seen by professional traders and analysts as just another bullish buy-the-dip chance.
On March 23, bears successfully sent the price of Bitcoin (BTC) below the $54,000 support mark, citing on-chain data indicating that whale wallets have started halting sales and shifting risk to institutional buyers.
According to TradingView data, the price retested the $54,000 support level for the second time this week, continuing the downtrend that started on March 22 and continued through Tuesday.
According to Coinshares data, BTC remains the prefered asset for institutional investors, while the market as a whole continues to expand significantly, with institutions currently managing $57 billion in reserves.
Although amateur traders and those new to the cryptocurrency room may see the recent depreciation as an indication of a bearish turnaround, Cointelegraph Markets analyst Michal van de Poppe sees the pullback as a bullish development for Bitcoin.
To me, this looks like a healthy correction for #Bitcoin.
As long as $49-51K holds, I’m assuming we’ll see continuation towards $68K.
— Michaël van de Poppe (@CryptoMichNL) March 23, 2021
According to CryptoQuant, an on-chain data supplier, 14,600 BTC left Coinbase in the early hours of March 23. BTC outflows are usually seen as a bullish development by traders since the idea of a supply shortage is a common bullish narrative among crypto pundits.
Although there is no way to prove that the outflows were triggered by whale accumulations, Whalemap analysis indicates that there has been substantial accumulation at the $55,000 mark, but the researchers warn that if the current support level fails, the next high support level is located at $47,438.
Jarvis Labs analysts took a subtly different stance, suggesting that traders look at more than just general trading flows to grasp BTC’s day-to-day fluctuations.
“It’s interesting to see what wallet is involved inside the general flows,” says Jarvis Labs co-founder Ben Lilly.
Jarvis Labs monitors one wallet, dubbed “Pablo,” and research reveals that the wallet has traditionally been associated with bearish pricing behaviour in the Bitcoin market. The last time Pablo moved BTC was during the late-February market correction.
More recently, the Jarvis team reported that Pablo started shuffling about 15,000 BTC on March 4, signalling that a price drop was imminent. The crash occurred on March 14, when Bitcoin soared past $60,000 and seemed to be on track for a new all-time record.
“This behavior formed the final leg of the last short-term bearish trend, which lines up with the upcoming largest options expiry. This is the type of thing that can clear the way for higher highs ahead. We’re still bullish on April, and general flows support this.”
Select altcoins rally as Bitcoin pulls back
Despite Bitcoin’s bearish market activity, a few altcoins were able to reach new peaks. As previously noted, the ‘Coinbase effect’ increased the prices of Ankr (ANKR), Curve DAO Token (CRV), and Storj (STORJ) by 50% to 100%, and trading is scheduled to begin on Coinbase Pro on March 25.
Theta (THETA) and Theta Fuel (TFUEL) prices rose more on Tuesday after it was announced that Sierra Ventures, Heuristic Capital, The VR Fund, and GFR Fund had “staked more than $100 million in THETA to a joint Enterprise Validator Node.”
Following the release, Theta rose 40% to a new all-time high of $14.21, while TFUEL rose 30% to a new high of $0.53.
The total cryptocurrency market cap is currently $1.69 trillion, with Bitcoin dominating at 59.8 percent.