- Approximately seven new BTC whales have joined the network in the past two weeks.
- The spike in buying pressure may soon be reflected in prices as Bitcoin holds above the critical support level
- If so, the next areas of resistance to watch are the $11,200 and $12,000.
Bitcoin (BTC) continues consolidating within a narrow trading range without providing a clear path for where it is headed next. Despite the uncertainty around it, different on-chain metrics suggest that large investors are choosing to buy Bitcoin evermore increasing their positions.
BTC whales “buy the dip”
After failing to turn the $12,000 resistance level into support, the flagship cryptocurrency went through a steep correction that took place at the beginning of the month. Bitcoin dropped by nearly 19% from a high of $12,086 to a low $9,800. The downward price action caused a state of commotion among market participants, while large investors took advantage of it to add more tokens to their holdings.
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Indeed, Santiment’s holder distribution chart shows that as prices plummeted, the number of addresses with billions of dollars in Bitcoin, known within the crypto community as “whales,” was increasing exponentially. The behavioral analytics firm recorded a 6.74% spike in the number of addresses holding 10,000 to 100,000 BTC. Approximately seven new whales joined the network over the past two weeks.
Such an upswing in the number of BTC whales may seem insignificant at first glimpse. But when considering these large investors hold between $108 million and $1.08 billion in BTC, the upturn can translate into billions of dollars worth of buy orders.
If the buying spree by these whales continues, Bitcoin may have the ability to regain some of the lost ground throughout September and finally move past the $12,000 mark.
Technical analysis: Holding on top of critical support
The bullish thesis holds when looking at BTC’s 3-day chart. Within this timeframe, the pioneer cryptocurrency seems to be trading on top of a critical support barrier. Based on historical data, the 50-three-day moving average has been able to contain falling prices at bay during the bull market of 2010-2011, 2012-2014, and 2015-2018.
If history repeats itself, Bitcoin may be about to resume the uptrend following the recent rejection from this hurdle. But first, it would have to close above mid-September’s high of $11,200 and turn the $12,000 resistance into support. Once these barriers have been broken, it is reasonable to assume that BTC would likely take aim at June 2019’s high of nearly $14,000.
It is worth mentioning that a candlestick close below the 50-three-day moving average, which is currently hovering around $10,100, could jeopardize the bullish outlook. If this were to happen, the bellwether cryptocurrency may plummet towards the 100-three-day moving average. This support level sits around $9,150.
On the cusp of a major price movement
Data shows that over the past few hours an important number of idle BTC coins have exchanged hands. Usually, when old tokens are transferred between different addresses, a major price movement tends to follow. Given the increasing buying pressure behind Bitcoin, this could be taken as a positive sign.
Nevertheless, it is recommended to sit on the sidelines until a clear break of the resistance or support levels previously mentioned. Now that Bitcoin seems to be on the cusp of its next bullish cycle, having cash ready to deploy is a must.
