Key Takeaways
Bitcoin led the overall market drop with its price now below $115k. Whales and institutions have been buying the dip though, escalating the growing signs of reversal.
Bitcoin’s [BTC] price slipped to $113,844 on the charts, following a 1.57% drop in 24 hours. At the time of writing, most of the crypto volume was being traded in BTC pairs too.
In fact, a daily chart analysis by Captain Faibik showed the crypto had broken below a rising wedge pattern. BTC appeared to be trading below the 50 EMA, affirming the bearish structure.
Optimal levels to watch
As per Axel Adler’s analysis, Bitcoin is now in the middle of a moderate pullback, down only 8% from its peak at $124k. The overlay of realized metrics on Bitcoin’s price highlighted three key levels.
The 111-day SMA, 200-day SMA and Short-Term Holder Realized Price were at $109.6k, $100.4k and $106.8k respectively. These zones could be ideal bounce areas.
At press time, Bitcoin’s price had hit the potential optimal zone of interest for buyers to accumulate. Historically, the cryptocurrency has rebounded after liquidity sweeps ahead of new ATHs.
Source: Michael van de Poppe/X
If history repeats itself, a sweep of liquidity below $112k -$113k could be a great entry for going long.
But, what would warrant a reversal?
The 4 triggers of reversal
For Bitcoin to confirm a reversal, four key conditions needed to be met.
First of all, the Bid-Ask Ratio across order books turned positive and this needs to stay so. This was bullish across the last 3 occasions when they marked a local bottom.
Secondly, the slippage spikes have to peak above 150. Every time BTC’s slippage has surpassed this value, the price has reacted by moving higher. This could be a sign of greater volatility in the market.
Source: Hyblock Capital
Thirdly, the True Retail Accounts Long % needs to fully reverse itself. At the time of writing, the value was 61.95%. Historically, readings above 60% have marked bullish pivots – A sign of a local bottom forming.
Finally, price needs to reclaim the 50 EMA and hold above it.
Whales return to buy the dip
In the middle of this correction, whales and institutions have been back in action though. On-chain trackers flagged a whale purchase of 200 BTC, roughly $23 million, signaling confidence in buying the dip.
Bitcoin legend Adam Back echoed this sentiment, noting,
“Dips exist to transfer Bitcoin from weak hands to stronger hands.”
Meanwhile, Glassnode showed supply held by First Buyers approaching 5 million BTC. This reinforced the view that long-term holders and big players were dollar-cost averaging aggressively into the decline.
Source: Glassnode
Together, these moves hinted at early signs of reversal. Still, confirmation will be critical to avoid a bull trap if BTC fails to hold its local bottom.
