As Bitcoin (BTC) faces heightened volatility below the $100,000 resistance zone, on-chain data suggests the digital currency may face further declines in the coming days.
Specifically, over 33,000 BTC valued at more than $3.23 billion has been transferred to cryptocurrency exchanges in the past week, according to data from prominent on-chain analyst Ali Martinez on December 27.
A breakdown of the data shows a sharp uptick in Bitcoin exchange reserves, rising from 2.395 million BTC on December 18 to 2.428 million BTC by December 25. This movement coincided with a decline in Bitcoin’s price, which dropped from $105,000 to $98,400 over the same period.
Notably, the rapid increase in exchange reserves could indicate that large holders, or whales, are preparing to liquidate their assets. Historically, such trends have been precursors to significant price corrections, as selling pressure outweighs buying demand.
Bitcoin’s bearish outlook
In a series of X posts, Martinez doubled down on the possibility of Bitcoin dipping further, noting the asset might plunge to as low as $60,000. He highlighted that the possibility of a drop is validated by Bitcoin breaking below its critical support zone at $97,300.
According to data shared by Martinez, this level served as a stronghold for Bitcoin, with 1.51 million wallets purchasing approximately 1.49 million BTC in this range.
For the bearish scenario to be invalidated, the expert noted that Bitcoin must reclaim the $97,300 level and, more importantly, achieve a close above $100,000. A sustained breakout above this level could pave the way for a significant rally, potentially targeting $168,500.
Similarly, financial educator Tony Vays warned that Bitcoin trading below $95,000 is “very bad” as it accelerates the probability of a correction to around the $73,000 zone. According to the analyst, dropping below $95,000 opens the door for the asset to slide to the $92,000 range, which “opens Pandora’s box” for a massive crash.
Regarding the technical setup, Bitcoin currently sits above its 50-day simple moving average (SMA) of $93,367 and well above the 200-day SMA at $70,470, indicating strong upward momentum.
The 14-day Relative Strength Index (RSI) at 53.53 reflects a neutral stance, suggesting Bitcoin is neither overbought nor oversold.
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