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Favored Bears: Analyst Eyes $26K

January 26, 2021 at 19:51 by Ibrahim Anifowoshe

Bitcoin’s price action as of late has greatly favored bears, with bulls being unable to generate any significant momentum. At 7:28 PM GMT press time, the cryptocurrency was trading at $32,156, losing 4.4% in the last 24 hours.

The pioneer cryptocurrency had a brief surge yesterday as the price hit $34,800, but holders sold off their BTC despite this price pump. Cryptoquant Exchange Whale Ratio broke 0.87, a level that it had last seen when the price of Bitcoin fell to $28,956. This suggest that there might be another price correction underway.

  1. In the past few weeks, the crypto has seen some strange price action. The mid-term trend has slipped through the hands of the bears and the bulls. However, the price action has continued to be favorable to sellers. As they move to sidelines, BTC bounces grow weaker and weaker.

Whales are selling off

  • The chart below explains the metric developed by CryptoQuant. It shows the ratio of the top-10 transactions to the inflows. For the bear market, the figure is usually above 0.85. While in the bull market, it’s below 0.85.

cryptoquant chart on whales

With the value hitting 0.87, it appears to strongly indicate that exchanges are seeing BTC inflows from top-10 transactions. This means that the whales are readily selling off or taking profit.

Bears continue to triumph

While this is ongoing, Bitcoin is currently trading at a notable decline from daily highs of over $34,500. With this decline, it suggests a distinct and sharp slide from the lows showing that the bears have a firm grip on the flagship cryptocurrency price action. It also means that BTC will experience a further fall before it may enjoy an uptrend anytime soon.

One analyst on Twitter, Bob Loukas, tweeted about how Bitcoin’s failed attempt to confirm a swing low shows the compounding weakness of BTC. He notes that with this, he’s watching for a move to $26,000. He tweeted:

BTC tried yesterday to form a confirmed Swing Low, but failed. That’s bearish for now. Starting to bear flag again, opening the door for that move towards a mid-60day cycle low. Daily close above $33,850 bullish

It appears that the king cryptocurrency would not be hitting $50,000 anytime soon. There are, however, strong indications that a retest of $40,000 is possible in exceptional cases. Where the price action will go next will depend on Bitcoin and its reaction to the key support levels that exists right around $32,000 and $30,000. A retest of yearly open at $28,956 is also on the table.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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