After the hype of the Bitcoin spot ETF’s approval, Santiment, a market on-chain analytics platform, has observed that the number of total Bitcoin wallets has been declining at the “swiftest rate” since early October, just days before the major crypto bull cycle started. The analytics platform also stated, “The crowd is showing a similar level of impatience this time around, with over 487K wallets holding 1 BTC or less being liquidated in the last 4 days alone.”
The reason behind this scenario is that it is due to market capitulation, a surge of selling pressure in the downtrend market. However, it should be noted that the past price movements have shown that traders’ optimistic sentiment could kickstart the uptrend once again. The market capitulation could have started due to the disappointing performance of BTC after the 11 spot ETF approvals, as several traders and crypto enthusiasts expected a bull market.
📉👋 The amount of total #Bitcoin wallets have been declining at their swiftest rate since early October (just before the major #crypto #bullcycle started). The crowd is showing a similar level of impatience this time around with over 487K wallets holding 1 $BTC or pic.twitter.com/K6LwSWYUYM
— Santiment (@santimentfeed) January 26, 2024
According to CoinMarketCap, BTC is currently priced at $40,178.16 after experiencing a 0.28% surge in 24 hours. Meanwhile, on the seven-day chart, Bitcoin records a 2.57% fall at the time of writing. The traders’ disinterest can also be seen through the 24 hour trading volume, which witnessed a 6.84% negative change.
BTC/USDT 1-Day Chart (Source: TradingView)
Observing the recent price action in the above chart, BTC’s candlesticks have begun testing the $39,749 support level, which is a massive fall from its highest point in just a few days. The support is also the 0.382 Fib level, which is often viewed as the common pullback zone.
Based on historical prices, BTC could bounce away from its current level if the support proves to be strong. On the other hand, if BTC continues to fall, then there is a chance that the candlesticks will fall even deeper to the 0.618 Fib level at $34,115.22. This coming weekend will prove to be crucial to determining whether Bitcoin will bounce away or fall to the expected support level.
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