Bitcoin (BTC) saw a sharp drop below $90,000 yesterday, raising concerns about its near-term stability. However, the cryptocurrency has since rebounded, trading above $96,000 at the time of writing.
This rapid recovery has attracted the attention of market analysts who are examining it The underlying trend driving Bitcoin price movement.
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Is Bitcoin’s Rise Above $96k a Stop Hunt?
A CryptoQuant contributor, Mignolet, shared an analysis highlighting recent price dynamics. According to the analyst, BTC’s recent drop to $89,000 and the current recovery started with breaking a key short-term support level.
Mignolet revealed that this pattern, called “stop hunting,” occurs when price waves temporarily break support levels before recovering. Despite the recovery, Mignolet insists that a true trend reversal will be needed Strong involvement From the main market participants.
Mignolet’s analysis points to significant sales activity among whale entities, as seen in Coinbase Premium Gap (CPG) data. Typically, buying whales step in to absorb such dips, creating significant volatility in the market.
However, this time, such activity was absent, which raises questions about the sustainability of the ongoing rebound. Additionally, Binance’s market-to-purchase ratio data suggests that large-scale buyers on the exchange have not capitalized on it. Recent price movements, Shows cautious sentiment among key players.
Further evidence revealed by Mignolet comes from exchange-traded fund (ETF) daily inflow and outflow data, which has yet to confirm any major changes. Market dynamics.
While the daily candlestick pattern suggests a meaningful move, the lack of whale participation may limit Bitcoin’s ability to sustain a long-term upside. Mignolet also warned that market sentiment could also change Haste for optimism without clear supporting data. The analyst noted:
While the candlestick pattern indicates a meaningful move, major players are not taking advantage of the opportunity. What worries me most is that many people’s feelings may soon turn to a sense of relief.
Bitcoin market performance
After a significant drop in price yesterday, dropping below $90,000 and triggering a total liquidation of over $300 million in the crypto market, Bitcoin is finally seeing a noticeable reversal in its bearish trend.
Specifically, over the past day, Bitcoin has gained 5.6%, bringing its price to trade at $96,351, at the time of writing. However, despite this increase, the asset is still about 10.8% below the peak of $108,000 recorded last month.
While Mignolet’s analysis suggested that Bitcoin’s bearishness may not be over yet, it’s worth noting that the asset’s current recovery has coincided with reduced selling activity from long-term holders.
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In a separate analysis, CryptoQuant contributor Darkfost expressed The change in the net position of long-term holders (LTHs) over the last 30 days remains negative but shows signs of improvement. From a low of -827,000 BTC on December 5, the figure has improved to -246,000 BTC.
This reduction in selling pressure suggests that LTHs are less inclined to sell at current price levels as the price of Bitcoin declines. However, Darkfoist noted that for a faster pace to regain strength, LTH would need to shift toward accumulation rather than reduction in sales.
Featured image created with DALL-E, chart from TradingView
