According to the latest Santiment data, Bitcoin whales bought extra 40,000 BTC in the last two days before the recent bounce to $42,000. The on-chain analytics firm notes that these large entities are back to owning the same amount before their dump began at $49,000. Bitcoin steadily declined from highs of $48,574 on Dec. 31, 2021, to mark lows at $39,650 on Jan. 10.
?? #Bitcoin has rebounded, and is +$1,000 in price the past 5 hours. Now sitting at $42.4k, this comes after whales have accumulated 40k more $BTC in the past 2 days alone. They now are back to owning the same amount from before their dump began at $49k. https://t.co/1ZnyrYpr1S pic.twitter.com/vR2GgXPUlZ— Santiment (@santimentfeed) January 19, 2022
With imminent volatility ahead, Santiment notes that traders' perceptions of large-cap assets vary. Bitcoin traders believe a buy-the-dip opportunity is near while Ethereum traders bask in euphoria.
Several indicators seem to suggest buy-in signals. The Entity-Adjusted Dormancy Flow of Bitcoin suggests that BTC is creating a local bottom. To establish whether experienced market participants are spending their BTC, this metric looks at the ratio of current market capitalization to annualized dormancy value.
Whenever there is a substantial drop in #Bitcoin spending from old hands, Entity-Adjusted Dormancy Flow drops below 250K, which represents a great buy zone.— Ali Martinez (@ali_charts) January 19, 2022
This metric has timed every market bottom & a similar outlook may play out now as dormancy value has overtaken market cap. pic.twitter.com/xhMiuxq3zT
When spending from the so-called "old hands" falls, the Entity-Adjusted Dormancy Flow falls below 250,000, indicating a buy zone. This metric has timed every market bottom, and now that dormancy value has surpassed market capitalization, the same scenario might play out.
IntotheBlock's IOMAP model points to the $41,180-$42,470 range as the key support to hold for the Bitcoin price as more than 1.22 million addresses previously acquired 615,000 BTC here.
$BTC price analysis— IntoTheBlock (@intotheblock) January 19, 2022
The IOMAP reveals that #Bitcoin currently sits at the last level of crucial support
Between $41,18k and $42,47k, more than 1.22m addresses previously acquired 615k BTC. As evidenced by the level of trading activity, bulls are fighting to hold here pic.twitter.com/GpN4cTmKNY
The on-chain analytics from Santiment notes that a stiff barrier exists on the Bitcoin path above $48,000 as nearly one million addresses holding 316,000 BTC here might want to break even on their positions.
Before the $48,000 barrier, Bitcoin must surmount selling pressure from 5.7 million addresses holding 1.54 million BTC.
Bitcoin trades at $42,000 at press time.