Bitcoin bulls are holding the selling pressure to 10% correction by absorbing most of the selling pressure in the BTC price. However, short term turbulence is likely to a low of $60,000.
The world’s largest cryptocurrency Bitcoin (BTC) has been facing some volatility recently dropping over 10% from its all-time high levels in March. As of now, Bitcoin is forming a base of around $66,000 before deciding upon the next course of action from here onwards.
Despite this downward price movement, on-chain data shows that buyers have been able to significantly absorb the downward selling pressure. Pseudonymous crypto analyst Checkmate posted on social media platform X that the BTC price pullbacks are barely hitting the 20% downside.
Furthermore, the current BTC price retracement from its all-time high levels remains capped at 10%. Citing data from Checkonchain, the analyst reported that the recent profit-taking and sell-side pressure has been mostly absorbed by the Bitcoin bulls.
A similar kind of occurrence took place last year in September 2023, with subsequent drawdowns reaching no higher than 15.8%.
Still my favourite #Bitcoin chart of this cycle.
Market is absorbing hundred million dollar sell-side days, and the bears still haven't managed a 20% pullback.https://t.co/y9FSJ128xh pic.twitter.com/LjY6fLwtCE
— _Checkmate 🟠🔑⚡☢️🛢️ (@_Checkmatey_) April 5, 2024
However, the Bitcoin price faces some challenges in the near term with the inflows into spot Bitcoin ETFs also drying up with time. Throughout this week, the newly nine spot Bitcoin ETFs have registered inflows of $100 million per day on average. This is nearly one-third of the $300 million registered last week by the ETF market. thus, Bitcoin ETFs aren’t providing enough catalysts for now to rally on the upside.
Short-Term Caution in Bitcoin
Some of the on-chain indicators also flash a warning sign for Bitcoin in the near term. For e.g. data from CryptoQuant shows that the Bitcoin funding rates are at all-time high levels. “Funding rates represent traders’ sentiments in the perpetual swaps market and the amount is proportional to the number of contracts,” the team explained.
The funding rates basically represent payments to traders based on the difference between the perpetual contract markets and spot prices. In April 2021, funding rates reached similarly high levels. Within three months following this occurrence, Bitcoin experienced a significant collapse from above $60,000 to below $30,000.
Courtesy: CryptoQuant
Another analyst IncomeSharks has also validated this stating that the BTC price might take a dip under $60,000 before resuming its upward journey towards $100,000.
#Bitcoin – It's amazing when you draw the channel from the low and high it hits $100,000 almost perfectly. Selling is a bullish catalyst and if you've been around long enough you know how much it thrives on fear and doubt. Convince everyone the halving was a flop, then send it. pic.twitter.com/RcLbuAKvKN
— IncomeSharks (@IncomeSharks) April 3, 2024
The crypto analyst presents two channels for the short term and the long term that could determine the BTC price action going ahead.
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