The ongoing Bitcoin rally faced resistance at the $ 39,000 level, despite the relatively high momentum. The price has dropped to $ 34,000 and below several times in the recent past. Meanwhile, institutional investors buy the declines to the data from Whalemaps.
Sales in derivatives exchanges attracted attention
Interestingly, there was a heavy sale on derivatives exchanges this week when the price was approaching $ 40,000. The recent decline may be the result of increasing active supply and decreasing HODLer reserves. Additionally, stock market reserves also reported a significant increase. Despite constant criticism from regulators, the price did not fall below the $ 30,000 level, indicating a positive sentiment among traders.
Bitcoin is currently trading at $ 36,100, according to CoinMarketCap data. Exchange entries play a critical role in setting the price, and on January 15, 561 BTC inflows were made to all exchanges in a single block. Cryptoquant.com CEO Ki Young Ju tweeted that Bitcoin could retest $ 34,400. Ju’s comments take advantage of recent stablecoin deposits on derivatives exchanges.
A new correction likely to be seen for Bitcoin
Investment flow soared last week in derivative exchanges rather than spot exchanges. Based on this change, Bitcoin’s rise to the previous ATH of $ 41,000 could again be interrupted by a drop to the $ 34,400 level. In the last sale, over $ 150 billion in market capitalization was deleted from BTC.
A correction is envisaged by technical analysts and in-chain analysts, but a change in the direction of investment flow could act as the “last nail in the coffin”. As selling pressure builds, Bitcoin could retest $ 34,400. This means that positions on derivatives exchanges will be liquidated and the price could drop below $ 34,400.
However, it may be interesting to observe the reaction to the price decline and the trading volume on derivatives exchanges. Whales’ response may be the primary factor in determining the direction of the price rally. Entries in the stock markets have proven effective in predicting trend reversal and price rally updates in the past, and could shed light on a trend change in 2021.
