Bitcoin falls to $38,000, whales still turn a blind eye

Bitcoin appears to be in a downtrend as buying pressure eases. The lack of interest in the spot market could lead to a deeper correction.

Bitcoin falls below critical support

Bitcoin Struggles to Find Support While Whales Stay on the Sidelines

The number one cryptocurrency broke below the $40,000 psychological support and was down to $38,000 at press time. The downtrend seems to be fueled by overleveraged traders in the futures market. Meanwhile, in the cash market, whales appear to be waiting for the asset to drop lower before accumulating more tokens.

At press time, about 67.6% of all accounts on Binance Futures are net Bitcoin users. Data shows that traders are still overconfident about future price action as the BTC/USDT long-short ratio has surged to a monthly high of 2.08.

Optimism among traders can often create conditions for a long squeeze, which appears to be occurring at the moment. The lack of whales returning to the market raises the possibility of a long push.

Source: Binance

On-chain data shows that the number of addresses on the network holding between 100 and 100,000 bitcoins has remained flat over the past month. These giants don’t seem interested in buying Bitcoin at current prices, possibly because they anticipate lower lows.

Source: Santiment

The lack of interest in the spot market is also reflected in the daily number of new addresses joining the network. Although bitcoin has rallied 40% over the past three weeks, the network hasn’t seen any significant growth. Glassnode data shows that the daily number of new addresses remains at an average of 400,000 per week.

Due to the high correlation between network growth and Bitcoin price, an increase in this on-chain metric is needed to support the price uptrend.

Source: Glassnode

Until then, Bitcoin could test the 200-day moving average on the three-day chart at $37,000 or the trend line in the Tom DeMark setup at $33,500. A failure to hold above this key support area could trigger a series of liquidations in the futures market and push prices even further lower.

Source: TradingView

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