As another wild week filled with liquidations and panic selling wraps up, a short-term rally managed to push BTC (BTC-USD) prices just north of $42,000. Still, dipping prices have triggered renewed interest as the ecosystem witnesses an influx of retail investors.
The Fundamental Look
Following a 24-hour low of $40,783.73, BTC prices have crawled back above $42,000 and are currently trading at $42,650.29. While traders claim BTC prices must cross the $43,600 resistance to reverse the recent downtrend, data from BTC futures and options indicate high-level signs of distress.
Over the last 25 days, every attempt to break BTC’s downward trajectory has faced some form of interruption. Whether due to the ripple effects of the recent Evergrande (EGRNF) crisis, the U.S. Senate’s failure to extend the debt ceiling to avoid a partial federal government shutdown, or the renewed crackdown on cryptocurrencies by the Chinese government, Bitcoin prices have struggled to inch higher.
Despite BTC’s trading at an ‘uninspiring’ range of $40,000 to $43,000, BTC whales are keeping calm and transferring more coins around the network in recent weeks, even more so than during BTC-USD’s run above $60,000. Bitinfocharts’ data echoes this reality, as the third-largest cryptocurrency whale added another 321 Bitcoins to its BTC holdings, accumulating a total of 111,794.59 BTC, or 0.5939% of the entire Bitcoin supply.
Data from on-chain analytics resource Material Indicators show that institutional investors continue accumulating the crypto while smaller whales are busy selling. Underscoring this point, Morgan Stanley Europe Opportunity Fund has become the second-largest investor in Grayscale Bitcoin Trust (GBTC), with recent regulatory filings indicating that the company owns 58,116 shares.
In mining news, publicly-traded miners are increasingly on the radar of investors as well. Even though BTC has climbed by about 290% year-over-year, surging from $10,695 to a little over $42,000, North American crypto mining company Marathon Digital Holdings (MARA) saw shares surge 1,641% over the same period.
Meanwhile, the number of nodes for the Lightning Network (LN), a Bitcoin layer-2 solution, has skyrocketed as a result of a wave of new implementations. According to a report by on-chain analytics provider Glassnode, Lightning Network nodes reached a record high of 15,600 in September, up from only 6,000 in August.
Whales of the Week
- September 23: 2,918.489 BTC moved from multiple addresses to an unknown wallet
- September 24: 7,628.083 BTC moved from multiple addresses to an unknown wallet
- September 25: 2,729.319BTC moved between unknown wallets
- September 26: 1,992.219BTC moved between unknown wallets
- September 27: 1,992.164 BTC moved between unknown wallets
- September 28: 2,500.000BTC moved from multiple addresses to an unknown wallet
- September 28: 6,960.000BTC moved from multiple addresses to an unknown wallet
The Technical Take
After inching higher earlier in the week, a sharp selloff on September 24th quashed the gains, sending BTC-USD prices lower for the remainder of the week. Bitcoin declined -4.07% over the past seven sessions but has managed to outperform Ethereum (ETH-USD) and Cardano (ADA-USD), which have fallen 6.28% and 5.57%, respectively.
Although BTC prices were lower week-over-week, they managed to continue to find support from the 50.0% Fibonacci Retracement level, meaning that the near-term uptrend remains intact, despite the sizable correction. The 38.2% level corresponding with $43,700 is the next level to watch on the upside if a rebound materializes. However, the pair remains below the 50-day and 200-day moving averages, acting as resistance on the upside at $45,400 and $46,600.
On a shorter term basis, BTC-USD has managed to break out to the upside from a downward trending parallel channel. Although not accompanied by higher volumes, it could indicate a reversal higher if the move is sustained. Any break higher than $43,400 potentially opens up the pair for a test of $44,100 and $44,900.
Should the decline in the pair persist, aside from the 50.0% Fibonacci level, traders should keep an eye on $40,700 along with $40,150 and $39,650, which are holding fast as secondary and tertiary support levels.
Disclosure: At the time of publication, Reuben Jackson did not have a position in any of the securities mentioned in this article.
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