It has been difficult for Bitcoin in the past few days. The cryptocurrency saw immense pressure on the sell side as the bears aim to eradicate the profits made as a result of the recent uptrend.
Where the cryptocurrency trends are next will largely depend on whether or not the recent disruption was below the support level of $ 17,000.
If bulls fail to regain this level in the short term, it could mean a decline towards their multi-week support at $ 16,200 is imminent. If that level is exceeded, it could seriously affect the technical prospects of the cryptocurrency.
An on-chain analyst points to a worrying trend that could indicate that a downtrend is imminent for BTC.
He notes that whales are quick to deposit BTC on the exchanges, which almost always indicates that pressure on the sell side is imminent.
Until trading activity subsides among these big Bitcoin investors, he concludes that it will either trade sideways or slide down.
This is due to the fact that investors are already nervous as regulatory concerns mount and the recent $ 19,500 denial significantly hurts underlying strength.
Bitcoin struggles to gain momentum while bears take control
At the time of writing, Bitcoin is trading just under 3% at its current price of $ 16,700. This means a rebound from daily lows of $ 16,500 but a decline from highs above $ 17,000.
Where all of the market trends will take place next largely depends on whether BTC can stabilize in its current price region or whether it can see a spike in the coming days.
A sustained decline from here could seriously affect the technical outlook and lead to serious losses in the medium term.
This on-chain trend is a problem for BTC
An analyst explained That an increase in trading activity among the Bitcoin whales suggests that another downward trend could be imminent in the coming days and weeks.
“BTC whales deposit on exchanges. I expect dumping in the short term. All stock market inflow averages (144 block MA) reached 2 BTC. I think we are in a danger zone. The price is likely to move sideways or down when whales are active on exchanges. “
Image Courtesy of Ki Young Ju. Source: CryptoQuant.
If whales start taking profits and unloading their stocks, it could put immense pressure on Bitcoin’s recent uptrend.
OKEx’s resumption of BTC withdrawals could also put pressure on the cryptocurrency’s near-term prospects.
Featured image from Unsplash. BTCUSD price data from TradingView.