The trend in the 30% rally in the price of bitcoin (BTC) over the past two weeks continued on Tuesday when the cryptocurrency surpassed $23,000, which also led to a new number of wallets posting gains.
According to analytics firm, Glassnode just now 68% of bitcoin wallets are in profit.
📈 #Bitcoin $BTC Percent Addresses in Profit (7d MA) just reached a 8-month high of 67.999%
View metric:https://t.co/ik5IkrcQZM pic.twitter.com/W5j6QMyDNk
— glassnode alerts (@glassnodealerts) January 24, 2023
The last time this happened was in the middle of last year when the price of the cryptocurrency was above $40,000 and in the midst of a downtrend.
This data reflects that most investors bought BTC at prices below $22,000/23,000 and not at the $30,000 levels after it declined from its peak price of $69,000.
Consequently, there was a lot of selling at a loss and current bitcoin owners have been acquiring their tokens at lower prices.
Other indicators shared by Glassnode reflect that, during the bear market, the accumulation of BTC at low prices increased strongly, with two peaks in particular.
“Inactive” coins, which have not moved between directions, or those saved for the long term, have reached 5-year highs in recent days. This means that hoarding is even higher and users are spending or selling less BTC than before.
Miners are selling fewer bitcoin
Glassnode’s data seems to coincide with the market appreciation made by the Bitfinex exchange, which claims that bitcoin sales by miners are “at a three-year low.”
“This indicates that miners are already in the process of transitioning to a source of buying pressure,” the platform said.
Bitfinex analysts highlighted that miners are holding back their BTC “because they anticipate further increases.”
Miners are entities that supply computing power to any blockchain network in exchange for “bounties” in the form of tokens.
They continually sell these rewards to cover operating costs, which are quite high, so declining sales by miners imply weaker selling pressure and are seen as an optimistic sign for the bitcoin market and the other cryptocurrencies.
However, the recent rise in the BTC price may create selling pressure as traders make gains within a less liquid market, analysts mentioned.
“The bitcoin accumulation was led primarily by large wallets (>$1 million). These wallets and large players absorbed the supply that followed the collapse of FTX and the plethora of other bearish events,” they stated.
$25,000 will be a critical price for BTC
Decentrader trading suite co-founder Philip Swift emphasized that the $25,000 price is now a critical level for bitcoin.
For Swift, in this area, bearish positions will start to be massively liquidated on derivatives exchanges.
Through a tweet, he stressed that said area is the site of BTC’s 200-week moving average (WMA), a key trendline that has been absent from the chart since mid-2022 when it failed to act as support.
Since then, the cryptocurrency spent a record amount of time below 200WMA, which currently sits at around $24,750.
“There is quite a bit of liquidity from $24,700 to $25,900 which aligns with the 200WMA and the area above it,” he explained.
There is a lot of liquidity from $24,700 – $25,900 which lines up with the 200WMA and the area
just above it 👀https://t.co/sqKr3pvJOn pic.twitter.com/y3gkpBM0nX— Philip Swift (@PositiveCrypto) January 24, 2023
In response to Swift, analyst Rekt Capital mentioned that “this level continues to act as resistance.” And he added that the last weekly close of the BTC price was also lower.
“BTC needs to settle at $23,400 as a base to move higher. Otherwise, there is a risk of a new lower high forming, relative to the summer 2022″ highs, he explained.
Meanwhile, analyst Michael van de Poppe published a chart of bitcoin showing where the leading cryptocurrency could start going now, following its failure to break above the $23,100 price level.
#Bitcoin couldn't break through a crucial resistance at $23.1K.
If we continue to make LHs, we'll probably test and sweep around $22.3K before continuation.
Grants some serious buying opportunities. pic.twitter.com/P8YPYAaHvU
— Michaël van de Poppe (@CryptoMichNL) January 24, 2023
In his tweet, Van de Poppe estimated that, if the dominant cryptocurrency holds lower highs, it could fall towards the $22,300 level and could even hold at that level for a while.
Meanwhile, analyst Benjamin Cuben called the recent rise in the price of bitcoin “unsustainable” and asserted that it will not be sustained, after comparing the cryptocurrency’s current price performance to what happened in the early 2020s.
In an analysis conducted for his YouTube channel, the expert observed similar BTC price action around January 2020 when the crypto asset peaked at $10,500.
Back then, bitcoin plummeted between February and March 2020, reaching a low of $3,800.
“One thing to keep in mind is that this here [bitcoin’s drop from $10,500 to $3,800 in early 2020] happened during the only recession we’ve ever had for bitcoin. It was very, very brief,” he said.
WARNING: This is an informational article. Geek Metaverse is a media outlet, it does not promote, endorse or recommend any particular investment. It is worth noting that crypto asset investments are not regulated in some countries. They may not be appropriate for retail investors, as the full amount invested could be lost. Check your country’s laws before investing.
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