Bitcoin may find it difficult to chart a V-shaped recovery to recent short-term highs, with on-chain activity showing greater selling pressure in the market.
The stock market inflow indicator from blockchain analytics firm CryptoQuant, which measures the average of 144 blocks (about 24 hours) of average bitcoin deposits across major cryptocurrency exchanges, rose to 2.5 bitcoin, the highest level since. March 20.
In other words, the average size of inward-bound transactions to trading platforms has risen to an eight-month high.
“The data shows the whales [large traders] they are transferring their coins into exchanges, “CryptoQuant CEO Ki-Young Ju told CoinDesk.” Cryptocurrency is usually traded side-to-negative when whales become active in exchanges. “
Bitcoin is trading close to $ 16,820 at press time, which represents a 2% drop on a 24-hour basis. The cryptocurrency saw more than $ 17,400 rejection early Friday.
The possibility of prices falling to or below Thursday’s low of $ 16,327 cannot be ruled out with average inflows now moving above 2 bitcoins – in CryptoQuant’s “danger zone”.
A reading above 2.00 on the indicator has consistently paved the way for significant price falls this year. The indicator rose above that level at least a week before the 40% drop recorded on March 12.
Similarly, the strong sell-off recorded in November 2018 was preceded by a sharp rise in the metric.
Technical chart studies indicate low odds of an immediate rebound to levels above $ 19,000.
Thursday’s price drop was supported by the highest sales volume (red bar) since June 1st. Therefore, the pullback appears to have legs. Short-term momentum indicators such as the 5 and 10-day moving averages now look south.
Support is seen at $ 15,798, the 38.2% Fibonacci retracement of the rally from the September low to the November high.