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.
Bitcoin price
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
1/ Support
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.
Alex Dovbnya
Denys Serhiichuk
Arman Shirinyan