Bitcoin’s (BTC) market is at a “crucial moment” after breaking key long-term support levels, coinciding with large BTC transfers from a digital asset treasury company to a major exchange.
Key takeaways:
Bitcoin risks plunging into a bear market if it breaks below the True Market Mean at $81,500.
Two wallets linked to Matrixport transferred 4,000 Bitcoin to Binance, fueling fears of a fresh sell-off.
Bitcoin price must hold $81,500
Bitcoin has dropped toward and found support near its True Market Mean (TMM), currently at $81,500, according to onchain data provider CryptoQuant.
The True Market Mean, or the Active-Investor Price, represents the cost basis of all non-dormant coins, excluding miners.
“This level has acted like a psychological line in the sand,” CryptoQuant analyst MorenoDV_ said in a Quicktake analysis on Wednesday.
Related: Bitcoin institutional buys flip new supply for the first time in 6 weeks
When BTC trades above it, investors are generally comfortable, but when this support is lost, the “same level often flips into resistance, as people who bought near the average cost use rallies to exit,” the analyst said, adding:
“Failure to hold the $81.5K level will likely result in a sharp break below, followed by a search for support in the coming months.”
The chart above shows that the BTC/USD pair traded above this level from Jan. 22 to May 5, 2022. When BTC dropped below this level on May 6, the price lost a further 61%, bottoming at $15,500 in November of that year.
The importance of this level is reinforced by the AVIV Ratio — a metric that compares active market valuation with realized valuation, focusing only on investor profits.
The chart below shows that the AVIV Ratio is at levels that have defined past mid-cycle transitions, a period where “the price tends to consolidate for a while, to subsequently either form support or confirm a bear market,” MorenoDV_ wrote, adding:
“We are at a critical moment.”
Trader and analyst Daan Crypto Trades said the BTC/USD pair will continue “ranging with a choppy price action” until the major support around the $84,00-$85,00 region is lost, or the “big resistance” at $94,000 is broken.
Matrixport bets on Bitcoin dropping further?
Bitcoin’s critical moment comes against the backdrop of renewed activity by whales who appear to be doubling down on their capitulation.
Lookonchain reported that two wallets, linked to financial services giant Matrixport, moved a whopping 4,000 BTC, worth approximately $347.6 million, to the Binance exchange.
Such large inflows often indicate the intention to sell or hedge positions.
Analyst 0xNobler said the company has “dumped 80% of its crypto holdings over the last 5 days,” adding:
“They’ve been non-stop selling millions in BTC on Binance.”
As Cointelegraph reported, long-term holders and “OG” whales have been aggressively selling their Bitcoin holdings since mid-October, threatening a prolonged BTC price correction to sub-$50,000 levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
