TLDR
- Bitcoin hits a 7-month low at $90,000; short-term holders increase accumulation.
- Over $1.82 billion in Bitcoin exits exchanges, showing growing investor confidence.
- Bitcoin’s support at $89,800 is key to a potential rebound towards $95,000.
- Despite the recent decline, data points to a potential bottom rather than a deeper bear market.
Bitcoin’s price recently dipped to $90,000, marking its lowest point in seven months. While this decline may raise concerns for some investors, many view the dip as a potential buying opportunity. Data from Swissblock suggests that Short-Term Holders (STHs) are accumulating Bitcoin at this level, a pattern often seen before price recoveries in past cycles. The lack of panic selling further supports the idea that Bitcoin might be nearing a bottom rather than entering a deeper bear market.
Short-Term Holders Show Confidence Amid Price Drop
Swissblock data highlights that the supply of Bitcoin held by Short-Term Holders (STH) is now in loss, reaching levels historically associated with market bottoms. Despite the drop, these holders are not panic selling. This behavior signals a lack of forced capitulation, often seen before a recovery phase in Bitcoin’s market cycles. In fact, when these STHs face significant losses, it often indicates that the price has reached a bottom, and a turnaround may be imminent.
The current lack of panic suggests that investors believe the drop is temporary. Historically, Bitcoin’s market has experienced similar patterns at previous lows, where accumulation by STHs led to price recoveries. Many investors see the current dip as a potential entry point rather than a signal of extended weakness in the market.
Macro Momentum Shifts in Favor of Bitcoin
Macro momentum appears to be shifting in Bitcoin’s favor, with exchange outflows exceeding inflows. Over the past 24 hours, over 20,000 BTC, worth roughly $1.82 billion, were withdrawn from exchanges. Such a large volume of outflows indicates growing confidence among investors. When Bitcoin moves off exchanges, it typically signals long-term holding, showing that investors are accumulating Bitcoin in anticipation of future price increases.
Exchange outflows have historically been associated with positive market sentiment. As coins leave exchanges and are stored in wallets, this reflects a decrease in the immediate selling pressure on the market. The ongoing trend of exchange withdrawals strengthens the outlook for Bitcoin’s price in the medium term, suggesting that the recent decline may be part of a larger consolidation phase rather than the start of a prolonged downturn.
Key Support Levels to Watch
Bitcoin is currently holding above key support levels, notably $89,800. This level has served as a strong buffer during the recent decline. If Bitcoin can maintain this support, it could trigger a rebound towards $95,000. However, if the price falls below this level, the next support is around $86,822. A drop below this threshold would weaken the current bullish outlook and could lead to further declines in the short term.
The ongoing support at $89,800 is critical for Bitcoin’s recovery. Should this level hold, it would indicate that buyers are stepping in to support the market, potentially driving prices back toward $95,000. If the market breaks through this support, Bitcoin could test lower levels, but the current signs of accumulation suggest that such a move may not materialize.
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