Key Takeaways
Bitcoin’s previous weekly high flipped from support to resistance. With bearishness growing, BTC’s uptrend could be paused. What is behind these increasing shorts?
At the time of writing, Bitcoin [BTC] traded at $118,237 with almost no change from the previous day closing price. Despite controlling $73 Billion in volume, BTC was short of the glory seen at the ATH of $123,000.
Since hitting a new ATH, Bitcoin price has been declining, but still remains volatile. Why is Bitcoin continuing to decline, then?
BTC support turns into resistance
Bitcoin turned the previous week highs into resistance after price broke below it during a retest. Earlier, price rallied past $120K after the successful retest of $110,000.
BTC has tendency to obey previous week highs or lows. That said, it is likely that the flip into resistance could keep Bitcoin in a correction for some time until the structure shifted.
Source: Hyblock Capital
From the chart, BTC could trade below the support at $116K with high potential to hit $113K, which coincides with previous week level.
As price continues to fall, more factors accelerate this tendency to stay below $120K.
Downtrend set to persist?
The fact that Bitcoin could continue staying below $120K stems from whales who are selling their spot position and shorting in the derivative markets.
One such whale is the owner of 80,000 BTC, which were accumulated in the era when Bitcoin was launched.
According to Marty Party on X, formerly Twitter, the whale has finally sold all the coins to treasuries, ETFs, and exchanges.
Source: X
As if that not enough, James Wynn, is also shorting Bitcoin and Hyperliquid [HYPE] with 40X and 10X leverage respectively.
The short has put Wyn in a profit of $473K in only 24 hours after his liquidation that happened a few days go.
Source: EyeOnChain/X
This development adds further confluence that, now could be time to stay on the sidelines as the markets take a pause.
Wynn’s impact may entice other market participants to short BTC or even the market makers could decide to wipe some of the profits for traders.
Kraken driving inflows
Additionally, gauging the inflows into exchanges, there has been a spike. Head of Research at CryptoQuant, Julio Moreno, noted that these inflows were driven by the Kraken exchange.
More dig into the data showed that about 18,761 BTC had hit the exchanges in the last 24 hours as of press time.
Source: CryptoQuant
The continued inflows suggest that traders were bagging profits before price finished the correction.
That said, it is important to watch exchange outflows, which could signal return to accumulation. Not until then, the uptrend could stay subdued.
