Bitcoin is walking back on some of its gains over the past few days. The number one cryptocurrency by market cap might be on the verge of a more significant retracement, which could push it back to the $30,000 zone.
As of this writing, Bitcoin (BTC) trades at $40,950 with a 2% loss in the past 24 hours. On the weekly chart, the cryptocurrency records a 3% loss, with all tokens in the top 10 by market recording a similar performance, except for Avalanche (AVAX).
Over the weekend, Bitcoin was rejected from the critical resistance level at $43,500. According to a pseudonym analyst, as the BTC price dropped to its current levels, a significant player placed a “substantial resistance block.”
The chart below shows that the selling order is 1,562 BTC, or around $7 million. It also shows thick support for BTC as the bullish momentum fades.
In other words, Bitcoin might slow down, but the area around $40,000 could provide critical support for a potential bounce. The analyst stated on the increasing selling orders appearing on the books:
Massive resistance added on BTC Binance Spot. This is what a top looks like. A substantial resistance block of 1562 BTC has just arrived in the order books.
While many believe that the market can absorb the spike in selling pressure, crypto analytics firm Material Indicators showed that Bitcoin is losing the support of major players. Over the weekend, players selling orders above $1 million “dumped” their positions.
The firm has been warning traders about this possibility by arguing that the recent bullish price action was a strategy to suck in liquidity from retail investors. Once this smaller player jumped in, whales began to “distribute” or sell their coins into the rally.
In that sense, the firm set a potential local top for BTC at $45,000. Keith Alan, one of Material Indicators senior analysts, stated the following on the current price action:
The good news is, at some point the market does flip to accumulation, and prices moving lower will get us to that point. As bad as it looks for bulls right now, I’m not expecting a straight line down. Time to exercise some patience and see how things develop from here.
Cover image from Unsplash, chart from Tradingview
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