Bitcoin is behaving differently this cycle ahead of the halving event: insights from on-chain data on BTC price
Bitcoin and other cryptocurrencies are on a downward trend following Bitcoin’s all-time high last week, with the price reaching $60,000. This correction could lead to further declines, including a potential flash crash, despite analysts’ positive long-term views. Ahead of the halving event, BTC price appears to be changing sentiment about the cycle due to bearish on-chain indicators.
Bitcoin rebounds amid rising FOMO
Bitcoin price rebounded to nearly $65,000 after hitting a weekly low of $60,000. However, cryptocurrency markets are anxiously awaiting the conclusion of Wednesday’s Federal Reserve meeting, which will play a key role in determining whether the recent correction is over.
Bitcoin, which has hit consecutive record highs in recent weeks, experienced a sharp decline last Thursday below $74,000 and fell more than 15% to $60,000 on Tuesday, with other digital assets falling along with it.
The decline in Bitcoin prices follows a recent decline in investment in U.S.-listed Bitcoin ETFs, in part due to investors’ hesitancy to take risks ahead of the outcome of the Federal Open Market Committee (FOMC) meeting.
Over the past seven days, BTC price has witnessed a significant decline in whale interest, with the measure falling from a high of $116 billion to $70 billion. This means interest in whales may decline and BTC’s volatility may slowly plummet and consolidate within a bearish channel.
However, Netflow remains in negative territory, suggesting that outflows are exceeding inflows. This reduces foreign exchange reserves and reduces the likelihood of selling pressure. CryptoQuant said Bitcoin supply on exchanges has declined significantly by nearly 40% over the past four years, and this trend is continuing as the Bitcoin halving event approaches.
This is positive news within the Bitcoin community as it suggests that the majority of investors are holding on to their assets without any immediate intention to sell.
What’s next for BTC price?
Bitcoin has bounced off its 200-day exponential moving average (EMA) at $61,000, showing that buyers are actively acquiring as the price drops to strong support levels. This prevented the BTC price from suddenly falling below support levels. At the time of writing, BTC price is trading at $64,454, down more than 1.5% from yesterday’s price.
The BTC/USDT trading pair is facing resistance at levels that were previously broken in a rising channel pattern. If the price declines and falls below the 200-day EMA, it indicates that the bears have turned the channel support into a resistance point. This conversion increases the likelihood of a decline to $59,000.
Conversely, if the bulls push the price back within the channel above $65,000, it means that the market has dismissed the initial collapse. In this scenario, the bulls will once again attempt to push the pair towards $70,000. Exceeding this threshold has the potential to rise to $75,000.