Bitcoin price dips to $61K range, encourages buying spree among BTC fish, dolphins and sharks
- Bitcoin price has been slowly proceeding toward lower boundaries of range to test support.
- Holders with between 100 and 1000 BTC are buying more.
- A falling wedge pattern suggests 20% upside potential for Bitcoin price.
Bitcoin (BTC) price is chopping downwards on the one-day time frame, while the outlook seen in the one-week period is a horizontal trade. In this shakeout moment, data shows that large holders are using the correction to buy up BTC.
Also Read: Bitcoin price may see further upside, Standard Chartered says, citing looser regulation and US spot ETFs
Daily digest market movers: Large holders buy Bitcoin ahead of 20% upside potential
Bitcoin price action is leaning toward the south but is confined within a falling wedge pattern. Characterized by two converging trendlines that slope downward as they gradually narrow the price range, this technical formation is encouraging holders with between 100 and 1000 BTC balances to buy more.
Bitcoin supply held by entities with balance 100 to 1K BTC
There appears to be a lack of significant market participation from new buyers, while so-called “hodlers” fail to see this cycle over yet. It is likely that the market could see more grind time between the established trading range.
The move to buy among the entities could mean diversifying their portfolio or averaging down their cost basis by purchasing more Bitcoin during price dips. This strategy can help them reduce their average purchase price over time.
Meanwhile, the BTC exchange-traded funds (ETFs) front continues to shape and accelerate price action. Wintermute, a leading global algorithmic trading firm in digital assets, has announced that it will be establishing its presence massively in Asia, specifically in Hong Kong.
This will come by way of a strategic partnership where Wintermute collaborates with OSL and HashKey to provide liquidity for Hong Kong's newly-launched spot BTC and Ether ETFs.
Wintermute's involvement aims to attract both institutional and retail investors by enhancing market liquidity, which is crucial for the ETFs' operation.
Technical analysis: Bitcoin price primed for a possible 20% upside potential
Bitcoin price is still grinding in a falling wedge pattern, with potential for a 20% rally upon successful breakout. However, based on the outlook of the momentum indicators, we could see more downside before this happens, ideally before BTC fills the bullish reversal technical formation.
The Relative Strength Index (RSI) continues to record lower lows since around mid-March, hinting at further downside momentum. The position of the Awesome Oscillator (AO) in negative territory also accentuates this stance, typically signifying a bearish trend in the market. These show that the downward trend may persist in the near term.
Accordingly, Bitcoin price could continue the fall to the $60,660 support level or lower, providing another buying opportunity in the $50,000 range.
BTC/USDT 1-day chart
On the other hand, if the $60,660 level continues to hold as a support, Bitcoin price could make a bounce here before a break above the upper trendline of the pattern. A decisive candlestick close above $63,871 following the breakout could set the tone for a 20% upswing to the profit target of the falling wedge at $76,166.
In a highly bullish case, Bitcoin price could extend to take back the $73,777 peak.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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