Bitcoin [BTC] fell 5.67% from its local high of $97.9k on the 14th of January. Following the sell-off on the 19th of January, the asset entered a short-term retracement phase.
It has lost control of the $94.5k local resistance, a level bulls have battled to regain since mid-November. Yet, it was not all doom and gloom for the leading crypto.
On the 16th of January, crypto analyst Maartunn pointed out that 41,800 Bitcoin were sent to exchanges within 24 hours. It was a clear sign of profit-taking pressure at a time when the price was about to challenge the short-term holder’s cost basis level at $99,470.
The analyst asserted that, so long as BTC is trading below the STH cost basis, the rally is a bear market rally and not a new bullish trend.
Assessing the Bitcoin resilience
In a recent report, AMBCrypto observed that the options market was showing renewed optimism. The Put/Call Ratio was at 0.71, which reflected bullish positioning.
Despite the macro FUD, Bitcoin whales who bought in December with a cost basis of $90k-$92k were not capitulating. Institutional demand was strong, and ETF flows were strong over the past week, with Monday breaking a 4-day positive streak.
The derivatives data also showed a bullish shift. The Buy/Sell Index transitioned from negative values on Monday, the 12th of January, to a sustained positive zone by the end of the previous week.
Crypto analyst Axel Adler Jr stated that the average weekly balance of derivative flow was bullish. This shift brought a sustained inflow of buyers, strengthening upward movements and increasing their chances of continuation.
Did the recent sell-off dent bulls’ plans?
The 4-hour chart showed that the swing structure on this timeframe was bullish. BTC was facing a deep retracement, and the 78.6% level at $91,154 was about to be tested.
The MFI showed strong selling pressure and downward momentum at press time, but there is hope for a bullish recovery if the $91.1k area is defended.
Final Thoughts
- The short-term holder selling pressure when Bitcoin rallied toward $100k last week showed weak conviction.
- The average weekly balance of derivative flow was turning bullish, and the H4 timeframe chart showed that a recovery is possible.
