Considering the ongoing Bitcoin price rally, where the asset surged over 12% from its yearly low, industry participants have been optimistic about it. However, recent data suggest that the possibility of a sustainable rally is declining.
Currently, the price chart for Bitcoin and other cryptocurrencies is moving sideways, affecting investors’ sentiments. The top 10 cryptocurrencies are said to yield very few profits to investors in a particular time frame.
Analysts suggest that Bitcoin has been highly correlated with the traditional financial markets since the end of 2021 and is currently in tandem with it. Crypto acts as a risk-on asset to the U.S. Federal Reserve (Fed) monetary policy as it raises interest rates to slow inflation.
Sources suggest that the sentiments in the traditional financial market have been bullish and have supported the 12% rise in Bitcoin prices. Still, the happenings in the crypto sector have also contributed to it. The low prices of the asset were fueled by the collapse of the FTX, triggering a capitulation trail.
The bullish momentum in recent times, followed by the low price levels, seems to be fading as the FTX fiasco trembled investors’ confidence in the nascent asset class. Data suggest investors are selling into the current Bitcoin price action.
Analysts suggest that Bitcoin whales are selling off their assets. An analyst shared on Twitter that:
“Around 33 whales holding 1,000 to 100,000 $BTC have left the network, and these whales sold or redistributed around 20,000 $BTC in the last 96 hours.”
The increase in sales of the holdings is likely due to the solid economic growth of the United States. The Fed can continue its tightening policy if the economy is resilient.
Other data from Jarvis Labs, an analytics firm, indicates that $16,550 and $19,150 have played crucial roles in the price charts. As the uncertainty prevails, leverage players take positions to start taking benefits from a future breakout. The positions mentioned above add liquidity above and below the Bitcoin price.
The chart below signifies that these levels have been holding the most extensive liquidity pools. Hence, if the crypto market taps into them, whales can drive the price in a specific direction.
An example of this could be Bitcoin whales can continue the sale of their holdings to reach a liquidity of around $16,500. This move will take out most of the leverage positions then the price can attempt to move the liquidity to the upside at approximately $19,150.
However, investors are not the only ones dumping their reserves. As Todayq News reported that, cryptocurrency miners have been under extreme pressure due to the meltdown of the crypto market and the difficult nature of Bitcoin mining, and they were left with no choice but to liquidate their holdings and sell 100% of all issued BTC in order to make up for their extraordinarily high losses.
As of writing, the price of Bitcoin is $17,166.10, which is 0.19% higher than the previous day.
