The supply of Bitcoin on centralized exchanges has continued to shrink to a multi-year low as BlackRock matches on with relentless BTC accumulations.
Bitcoin BTC $65 521 24h volatility: 2.8% Market cap: $1.31 T Vol. 24h: $48.69 B price has quickly turned bearish in the past two days after a potential fake-out earlier this week above $100K. The flagship coin dropped over 5% in the past 24 hours to trade about $95.9K on Wednesday, January 8, during the mid-London session. As a result of the heightened crypto volatility in the past 24 hours, more than $711 million was liquidated, with the lion’s share involving long traders.
After slipping below the crucial support range between $97K and $99K, Bitcoin price faces further midterm correction. From a technical analysis standpoint, Bitcoin price has been forming a potential reversal pattern characterized by a head and shoulders (H&S) pattern, coupled with a bearish divergence of the Relative Strength Index (RSI).
As a result, Bitcoin price is likely to drop to the recently established support level of around $92K. Already, Bitcoin price has closed two days below the 50-day Moving Average (MA), suggesting the bears are gaining control.
In case the support level around $92K fails to hold in the coming days, Changpeng Zhao’s prediction of Bitcoin price dropping from $100K to $85K will be fulfilled.
Bitcoin Whales Relentless Accumulation
Despite the bearish Bitcoin outlook, on-chain data shows that whale investors have continued to accumulate more Bitcoin. With major central banks having admitted the interesting nature of Bitcoin, more gold investors are more willing to shift their funds to BTC products to hedge against the ever-present inflation and ongoing fiat devaluations around the world.
In the past 24 hours, the supply of Bitcoin on centralized exchanges declined by around 11,783 coins to stand at about 2.19 million, a new multi-year low.
The US spot Bitcoin ETF issuers led by BlackRock have continued to purchase in the past few days. On Tuesday, BlackRock’s IBIT led the US spot BTC ETF issuers with a net cash inflow of onboarding $596 million.
However, due to the notable cash outflows to the rest of the ETF issuers, the net cash inflows to Bitcoin’s investment product on Tuesday were about $52 million.
A Silver Lining
The cryptocurrency macro bull run, which began almost two years ago, will possibly continue in the near term after the much-anticipated inauguration of President-elect Donald Trump in two weeks. Although the inauguration of Trump later this month could turn out to be a sell-the-news event, the positive crypto regulations expected will have a profound bullish impact in the long term.
Already, more nation-states, led by the Czech Republic, have been discussing adopting Bitcoin as a hedge against inflation amid the expected implementation of a strategic Bitcoin reserve by the United States.
As Coinspeaker noted, Bitcoin price is likely to rally beyond $110K soon fueled by rising demand from whale investors. From a techno standpoint, Bitcoin’s macro bull run does not peak until the monthly Relative Strength Index hits 90 percent.
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