After the nearly 20% plunge in BTC price, the cryptocurrency spent the next day consolidating and retesting the critical 200-day moving average at $46k.
BTC managed to hold the level for the daily close, a positive signal. Near term, it is important to continue holding $46k, complete long liquidations, and start a recovery to reclaim $47.2, the bottom of the green zone.
Strong Hands Holding Older Coins Did Not Sell
Although BTC fell slightly the day after the major drop, on-chain data continues to firmly show long-term holders, and entities holding older coins continue to accumulate, showing no signs of whale exit liquidity.
Chart by CryptoQuant
Yet again, the 3 to 6-month-old cohorts panic sold the dip. Keep in mind, this group accumulated BTC between $50k to $64.8k. It’s highly sensitive to shakeouts as they experienced 2 massive drawdowns in the past few months.
Chart by CryptoQuant
Yesterday miners sold a small portion of their holdings, and today miner outflows remained flat as it has for the entire year. In short, miners are back in accumulation and show no interest in selling BTC at current levels.
Leveraged Flushed Out – Long Liquidations Cooling Off
Over the past 2 days, futures open interest continued to consolidate with a slight drop below $9 billion. Long liquidations have been cooling off, which weakens near-term selling pressure. With price consolidating with a wedge forming, volume falling, and Bollinger bands squeezing on the hourly chart, this suggests a potential move is coming.
Chart by TradingViewChart by TradingView
Near term, it is important to see long liquidations cool off as that will help prepare BTC to make a move higher. Technicals on the hourly and 4-hour chart have flattened, indicating a near-term base of support has been built, and the price is preparing for a move.
It would be good to see BTC reclaim $47.2k, a heavy zone of support/resistance, according to the UTXO Realized Price Distribution metric. Reclaiming this key level will be a bullish near-term signal for BTC.
So far, it’s good to see BTC holding the 50-day MA at $44.7k, as this level acts as solid support during powerful uptrends.
Third Largest BTC Whale Buys 1,955 BTC in 2 Days
The third-largest BTC whale accumulated this dip, adding 1,955 BTC in the last 2 days, around $46.1k to $46.8k. This is the largest purchase since June 2021. If this buying turns into a trend, it can be seen as a very bullish signal. Keep in mind, the whale entity still has hundreds of millions of capital ready to deploy after selling 9,000 BTC in the past month, potentially to break even and rebalance.
Chart by Bitinfocharts
With on-chain metrics firmly trending higher near term technicals improving, we can expect the start of a recovery after the massive liquidation event. If Bitcoin manages to push back above $47.2k, this will likely build further bullish momentum in attempting to reclaim $50k.