Bitcoin is back in the race: Big investors ignite a rebound with a huge $2.8 billion purchase.
The recent weeks have been quite a rollercoaster ride for Bitcoin investors. Concerns about inflation and geopolitical tensions have had a significant impact on the cryptocurrency market, causing Bitcoin and other altcoins to plunge to levels not seen since early 2024. Bitcoin, the top cryptocurrency in the world, dropped to as low as $56,500 this week, a significant drop from its record highs of over $70,000 in March.
Despite the downturn, some analysts are cautiously optimistic about a potential short-term recovery. This positive outlook is driven by several factors, including increased buying by major investors, positive technical indicators, and historical price trends.
Whales Dive In: Buying The Bitcoin Dip
A notable development is the recent buying spree by Bitcoin whales. These large-scale investors, with substantial Bitcoin holdings, have been accumulating the digital currency rapidly.
#Bitcoin whales accumulated 47K $BTC in the past 24 hours. We’re entering a new era. pic.twitter.com/SXgzToN8GU
— Ki Young Ju (@ki_young_ju) May 3, 2024
According to Ki Young Ju, founder of CryptoQuant, Bitcoin whales acquired a remarkable 47,500 BTC tokens, valued at over $2.8 billion, within just 24 hours. This aggressive buying behavior indicates that these whales see the current price decline as a buying opportunity, a sentiment often considered bullish for the market.
Technical Indicators Flash Green
Technical analysts are now closely examining on-chain data to determine Bitcoin’s future direction. One analyst, Dan from CryptoQuant, is particularly focused on the Spent Output Profit Ratio (SOPR) metric, which assesses the profitability of Bitcoin transactions.
Total crypto market cap at $2.2 trillion. Chart: TradingView
When the SOPR falls to the lower Bollinger Band – a volatility indicator – it can indicate oversold conditions and a potential price recovery. Dan suggests that this is the current scenario, hinting at a possible uptrend for Bitcoin.
Investor Sentiment Cools: A Sign Of Things To Come?
Another interesting observation is from IntoTheBlock (ITB), a market intelligence platform. ITB has noted a significant decline in positive sentiment among investors during the recent correction. While a pessimistic outlook may seem negative, ITB argues that this cooling-off period could precede a market rebound.
Bitcoin dropped below 57k this week, hitting the same levels of holders in loss as in similar drawbacks in the previous cycle.
🟢The main demand zone to watch sits around 58k currently.
🔴On a move to the upside, we could expect more sell pressure around $62k. https://t.co/uwKcrjhNee pic.twitter.com/YKs42WtPWw
— IntoTheBlock (@intotheblock) May 3, 2024
In the past, decreased investor enthusiasm has often been followed by increased buying activity as the market stabilizes.
BTCUSD price action in the last 24 hours. Source: CoinMarketCap
Price Action Confirms Analyst Predictions?
Bitcoin’s current price movements seem to support the predictions made by these analysts. At the moment, BTC is trading around $63,309, showing a 6.3% rise from the previous day’s price. While this doesn’t guarantee a sustained upward trend, it indicates a potential short-term recovery.
Featured image from 15Five, chart from TradingView
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