Bitcoin Recoils from $42k, Are Bulls Exhausted?
Undoubtedly, the Bitcoin price has been on a tear in the last six months. Bulls successfully managed to navigate through the compression following the halving of 2020 before springing to $42k in slightly over seven months. Considering how parabolic gains have been, especially in H2 2020, the absence of follow-through and a push above $42k prompted Crypto Quant's CEO, Ki-Young Ju, to call a local top and predict a pullback in the immediate term citing miner liquidation.
The Bitcoin price has been parabolic in the last seven months. Bitcoin's market cap forms a big part of the $1.1 trillion cumulative market cap. However, Ki is now calling a local top expecting a price contraction without specific targets. In their assessment, Bitcoin miners have been unloading their stash in the last 12 weeks. According to data from Byte Tree, miners are active, consistently dumping. Even so, their dumping is met with unprecedented demand from PayPal, CashApp, Robinhood, and institutions—including family offices, who are doubling down on Bitcoin in their diversification push. Because of their participation, bulls remain firm, but bears could win in the immediate term.
Impact on the BTC Price:
Bearish. The role of miners can't be relegated since their continuous dump signals pessimism in price. For this, their actions are usually monitored by traders. Despite huge demand by institutions, lower lows could cause them to reassess their plans and buy low, withdrawing their support, causing prices to tank.
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