The $BTC price continues to chop along sideways even after pushing through a downtrend line that was respected for nearly 3 months. Are long term holders still distributing? Is a strong upside rally still a possibility?
Nearly half of all remaining BTC sold
Source: Bitcoin Magazine Pro
Some staggering data was recently published by Bitcoin Magazine Pro, which claimed that around 7.5 million BTC has been distributed by long term holders over the course of this current bull market. If one takes into account that probably around 4 to 5 million BTC has been lost, this would mean that nearly half of all BTC has been sold at some point during this cycle. With this much selling pressure it can then be assumed that the demand for Bitcoin must have at least equalled it.
Is the selling coming to an end?
Source: TradingView
If one looks at the 4-hour chart for $BTC it can be noted that every time the price takes off to the upside it is slammed back down again. This would fit with market makers selling into strength on behalf of clients looking to liquidate some of their long-term Bitcoin holdings.
It then remains to be seen how much $BTC is still to be sold. With 7.5 million $BTC already having been dumped, wouldn’t an end to the selling be on the near horizon?
From a TA perspective, this is a real possibility. The downtrend line has been breached and the price has come back down to retest it. All would now appear to be set for a rally. Many of the weaker hands have probably sold, and as soon as market makers are willing, the price could just shoot up out of nowhere.
A lower low still a possibility?
Source: TradingView
The daily chart reveals how the $BTC price has been back to retest the downtrend line and how it is now sitting above the major ascending trendline. There is still the possibility that there could be another reverse or two before the rally gets going in earnest. This could imitate a Wyckoff accumulation pattern and might entail a dump to an even lower low, being the ‘spring’ for an eventual strong rally.
The bottom of the chart shows the RSI indicator line has bounced from the downtrend line after a breakout. This is bullish as long as the indicator line holds above, and even more bullish if it heads higher.
A tale of two falling wedges: can history repeat?
Source: TradingView
The weekly chart view for the $BTC price is revealing. If one just takes things from a very simple perspective, both the major ascending trendline and the downtrend line are holding firm, at least thus far.
The previous falling wedge broke out from a similar position and the price rallied strongly. There isn’t really any reason why this can’t be repeated.
At the bottom of the chart, the Stochastic RSI indicators are posturing to cross back up. It was at this exact point for the previous falling wedge that the price really took off. Is the same thing about to happen this time?
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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