Bitcoin Sharp Rebound Above $95K: Stop Hunting or Trend Reversal?

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Yesterday, Bitcoin (BTC) experienced a steep drop falling below $90,000, causing some to question its short-term resilience. Nevertheless, it has since regained strength and is currently trading over $96,000 as we speak.

Market analysts are closely scrutinizing the swift comeback of Bitcoin, as they investigate the fundamental factors influencing its price fluctuations.

Is Bitcoin’s Surge Above $96k A Stop Hunt?

Mignolet, a CryptoQuant contributor, recently posted an analysis detailing the latest trends in Bitcoin’s price movement. From his perspective, the recent dip to $89,000 and subsequent uptick can be attributed to the breach of a crucial short-term support level.

According to Mignolet, a phenomenon known as “temporary break of support” happens when the price fluctuates below its supporting level, but later recovers. However, he stresses that a genuine change in trend would necessitate more substantial participation from influential market players.

The examination of Mignolet reveals a high level of cryptocurrency sales by large investors, or “whales,” based on the Coinbase Premium Gap (CPG) figures. Normally, these big buyers would purchase during these price drops to stabilize the market, leading to noticeable volatility.

Instead, this occasion saw no sign of such activity, sparking doubts about the durability of the current recovery trend. Moreover, Binance‘s market-buy ratio data hints at a lack of major buyers leveraging the recent price fluctuation, suggesting a cautious attitude among significant investors.

New details provided by Mignolet also include analysis of daily inflows and outflows in Exchange-Traded Funds (ETFs), suggesting no significant changes in market trends so far.

Although the day’s candlestick formation indicates a significant price shift, the absence of major investors (whales) could hinder Bitcoin’s capacity to maintain a lasting uptrend. Mignolet also cautions that market feelings might change rapidly towards optimism without solid evidence to back it up. The analyst points out:

Although the candle formation suggests a significant shift, it seems the key players aren’t taking advantage of this chance. What worries me even more is that public sentiment might change too hastily into a feeling of reassurance prematurely.

Bitcoin Market Performance

Following a significant drop in price that fell under $90,000 and resulting in over $300 million worth of liquidations in the cryptocurrency market, Bitcoin appears to be experiencing a discernible shift away from its downward trend.

In the past 24 hours, Bitcoin has seen an uptick by approximately 5.6%, currently trading at around $96,351. Yet, even with this rise, it remains about 10.8% below its peak of over $108,000 achieved last month.

Although Mignolet’s assessment indicates that Bitcoin’s downtrend may persist, it’s important to mention that its recent uptick occurs concurrently with a decrease in significant sell-offs by long-term investors.

In a separate examination, CryptoQuant’s Darkfost found that the net change in long-term holders’ positions over the past month has been negative but is showing signs of recovery. The lowest point was -827,000 Bitcoin on December 5, but it has since improved to -246,000 Bitcoin.

The decrease in the urge to sell indicates that Long-Term Holders (LTHs) might be less likely to offload their Bitcoins at present prices as they drop. But, Darkfost points out that for a bullish trend to recover its force, LTHs should transition from selling to amassing more Bitcoin instead.

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2025-01-15 03:40