Bitcoin (BTC) Could See A Strong Pullback From Recent Drop

• Despite recent Bitcoin price correction, technical indicators and on-chain data indicate BTC’s resilience as bulls strive to reclaim levels above $44,000.
• However, support at $40,000 remains crucial, and on-chain data suggests a preference among investors to hold rather than sell.

On Monday, December 11, the world’s largest cryptocurrency Bitcoin (BTC) faced massive selling pressure with its price cracking to a low of $40,500. The BTC price, however, has recovered since then and is currently trading at around $42,000 levels.

Bitcoin (BTC), currently priced at $41,665, demonstrates resilience, as evidenced by technical indicators and on-chain data, amid bullish efforts to reclaim levels above $44,000.

Bitcoin is currently undergoing a correction, attributed to the formidable resistance at the $44,000 supply zone. The Lookintobitcoin golden ratio multiplier indicator, reflecting Bitcoin’s adoption curve and market cycles, signals that the 1.6 multiplier target has been reached around $44,000, where BTC has struggled to break convincingly for the past week.

This indicates that Bitcoin is encountering strong rejection from the supplier congestion area at $44,000, posing a challenging obstacle for bullish momentum.

Courtesy: LookonChain

Oon-chain data from IntoTheBlock’s “in/out of the money around price” (IOMAP) model, further reinforces the resistance thereby revealing a price range of $43,346–$44,627. Also, in this range, 1.43 million addresses have previously purchased approximately 585.77 BTC.

Any attempts to surpass this level may face aggressive selling from this group of sellers, possibly aiming to break even, intensifying the challenge for upward movement.

Courtesy: IntoTheBlock

Speaking to Bloomberg, Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets said:

“Crypto finally saw some profit-taking after a dizzying surge over the past few weeks. We expect to see further idiosyncratic volatility in the crypto asset class in the run-up to the ETF decision deadline in early January, which could be exacerbated by poor liquidity during the holiday period.”

What’s Ahead for Bitcoin?

For now, $40,000 seems to be a crucial support zone for Bitcoin (BTC) going ahead. Renowned cryptocurrency analyst Ali Martinez suggests that in the event of a more significant correction, Bitcoin has robust support in the range of $37,150 to $38,360. This support zone is substantiated by 1.52 million addresses collectively holding 534,000 BTC.

Martinez also highlights potential obstacles to Bitcoin’s upward trend, pointing out two resistance walls at $43,850 and $46,400 that could impede the cryptocurrency’s ascent. He further added that Bitcoin whales have been capitalizing on this recent price drop, with addresses holding 1000+ BTC, accumulating more.

In the wake of the recent #Bitcoin price dip, there’s been a noticeable uptick in entities holding 1,000 $BTC or more. This increase suggests that #BTC whales are seizing the opportunity to accumulate more. pic.twitter.com/cQ8G76eIAO

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The ongoing market correction might be a potential bear trap, representing a healthy adjustment within a more extensive bullish trend established in recent months. Notably, data from crypto market intelligence firm Santiment indicates a rise in Bitcoin’s exchange outflows.

Courtesy: Santiment

The chart reflects a BTC exchange flow balance of -347, indicating that outflows are surpassing inflows. This trend suggests a preference among investors to hold rather than sell, signaling a bullish sentiment. Consequently, the recent dip to $40,000 could be a short-term correction, presenting traders with an opportunity to capitalize on the dip before a potential continuation of the upward trend.