Bitcoin’s price has shown signs of immense weakness in the past few days. Recent rejections of $ 19,500 drove it down as analysts watch for further downside moves.
The rejection just below their all-time highs was certainly the trigger for the ongoing correction, but several other factors play a role here.
One such factor is the recent comments from the U.S. Treasury Secretary on a possible wave of regulations in the crypto market before he resigns from his position in late January. It remains unclear whether the next government will take the same aggressive approach to crypto.
Another factor that may actually be the main boost to this sell-off is OKEx, which enables withdrawals for users whose Bitcoin was previously locked on the platform for well over a month.
This coincided closely with the recent sell-off, suggesting that this could be a factor.
Data from an analytics firm shows a total of 212,000 BTC has left the platform since withdrawals resumed. Traders whose crypto was locked during the last rally may have used this as an opportunity to take profits off the table.
Bitcoin struggles to gain momentum when selling pressures rise
At the time of writing, Bitcoin is trading a little over 2% from its current price of $ 16,780. This is a massive drop from the recent highs of $ 19,500 that were set at the height of the recent uptrend.
The decline that has forced BTC into the $ 16,000 region came immediately after being rejected at its all-time high, suggesting that selling pressure is significant here and may further hamper price movement in the days and weeks to come.
Where this plays out over the medium term may depend largely or entirely on whether or not bulls can reclaim $ 17,000 – which was a major level of support previously.
Data suggests that OKEx withdrawals may lead to an ongoing sell-off
One of the main drivers behind the $ 3,000 sell-off that Bitcoin has seen since hitting its all-time high is OKEx, which enables withdrawals.
As an on-chain analytics platform explained::
“Since yesterday OKEx announced that it would resume withdrawals, there has been an outflow of 29,300 BTC from the exchange. In the same period, 21,600 BTC were deposited, which reduced the balance of the exchange to ~ 212,000 BTC. “
Image Courtesy of Glassnode.
The coming days should give an insight into where Bitcoin is developing in the medium term. Since most of the previously banned BTC on OKEx has already been withdrawn, there is a high probability that this sell-off will cool off.
Featured image from Unsplash. Charts from TradingView.