Bitcoin BTC price has dipped to $47,000 on April 25 but has swiftly regained the losses incurred and now sits at price an inflection point. Indeed, it could very well kick-start another BTC rally that takes out the current highs as Ethereum ETH has, or it might be the start of a much steeper price correction.
The weekly chart puts the flash crash in perspective and shows that the downward impulse pushed Bitcoin price into the early March territory but failed to test the 21-week Exponential Moving Average (EMA) at a price of $44,996. Had this level been tapped, the bullish scenario would have been acceptable.
During the previous price bull runs, Bitcoin bounced off this EMA as it continued its parabolic growth. Hence, investors could get to see Bitcoin BTC price come to such a crucial support level this time around. But for that to happen, a decisive daily candlestick chart close below the 100-day Simple Moving Average (SMA) at a price of $50,655 must occur. Although the 21-week EMA could keep falling prices at bay, failing to hold above it would likely lead to a downswing to the 200-day SMA at a price of $36,022.
Dave The Wave, a renowned price technical analyst in the cryptocurrency community, believes that the bearish carries a lot of weight. According to the chartist, the current BTC bullish cycle resembled the one in 2017. When considering the recent BTC price action and the evolution of the Moving Average Convergence Divergence indicator, a steep correction could unfold.
Dave clarified that “a solid price correction does not entail a multi-year bear market,” but it may be needed to maintain Bitcoin’s price uptrend healthy.
Several on-chain metrics support the level that a steeper correction is underway.
For instance, the number of daily price active addresses interacting with the Bitcoin BTC network has been steadily declining over the past few weeks. It went from 1.10 million daily active addresses to roughly 1.05 million addresses, representing a 4.50% drop.
Such on-chain activity suggests that Traders could either be booking profits or reallocating their funds, which is a bearish sign.
Moreover, Bitcoin’s 365-day MVRV reveals that most of the Bitcoin BTC tokens purchased over the past year sit 50% higher than at the time they were acquired. The high support levels of profit that investors could incur now if they were to sell indicate that a potential price spike in profit-taking is underway.
Interestingly, the recent BTC peak seen in the 365-day MVRV coincides with the high of late June 2019, which marked a local top at the time. A similar market price reaction to this on-chain metric could see Bitcoin BTC correct to at least the 21-week EMA at $44,996.
Despite the grim worst-case scenario, price whales continue accumulating more Bitcoin at every dip.
Bitcoin’s supply distribution chart shows that the number of addresses with 10,000 BTC or more has significantly increased their holdings over the past week. These high-net-worth individuals acquired roughly 60,000 Bitcoin BTC and now own nearly 14% of the total supply.
The massive buying pressure behind the flagship cryptocurrency opposes the BTC bearish scenario outlined above, calling for a continuation of the price uptrend.
f buyers can manage to push the Bitcoin price above $60,103 and hold above this crucial point hurdle, the BTC bearish scenario will likely be invalidated.
Still, investors must pay close attention to the 100-day SMA at a price of $50,655 since a decisive close below it will send BTC price into a tailspin toward the 21-week EMA at $44,996 or the 200-day SMA at $36,022.
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