Bitcoin Holds Steady After Recent Breakout
Bitcoin’s price is currently stabilizing following a significant breakout earlier this month. As of recent reports, it was trading near $117,100, marking a 1.3% increase in the past 24 hours and a 3% uptick over the week. The breakout from a head-and-shoulders pattern on September 10 indicates a potential upward trajectory with a target price of $120,800.
However, not everything is smooth sailing in the crypto seas. Two troubling on-chain signals—selling by large balance groups and movements by younger coin holders—suggest that we may see a 2% correction before the rally can continue.
Selling Pressure From Large Balance Groups
Recent data shows that two significant wallet groups, commonly referred to as “whales” (wallets holding 1,000–10,000 BTC) and “sharks” (those with 10,000–100,000 BTC), have been trimming their holdings since September 15.
- The 1,000–10,000 BTC group has decreased its holdings from 4.35 million BTC to 4.33 million BTC.
- The 10,000–100,000 BTC cohort fell similarly from 2.17 million BTC to 2.16 million BTC.
This represents a net outflow of about 30,000 BTC over a mere four days, translating to approximately $3.5 billion worth of Bitcoin being removed from circulation. Such drops are often indicative of large investors taking profits or preparing for potential volatility.
Younger Coin Holders Contribute to Selling Pressure
In addition to the activity from larger wallets, younger coin holders are also showing signs of movement. The Spent Output Age Bands metric, which categorizes coins based on how long they’ve been held, indicates that younger holders are increasingly cashing out.
Over the past two weeks, there’s been a noticeable increase in sold coins categorized by age:
- Holders from 1 week to 1 month increased their sold share from 8.72% to 9.78%.
- The 1 to 3 month cohort saw a rise from 3.67% to 6.08%.
- For those holding coins 3 to 6 months, sold coins moved from 2.04% to 3.26%.
- Lastly, the 6 to 12 month holders went from 1.64% to 3.18%.
Younger holders, defined as those who acquired their Bitcoin within the last year, are typically more likely to sell during price spikes compared to long-term holders. This increase across multiple age bands signals that many short- to mid-term holders might be looking to cash out, reinforcing the supply pressure already indicated by large balance groups.
Technical Analysis of Bitcoin Price Chart
Despite these warning signs, the technical setup for Bitcoin remains largely bullish. Following the breakout above an inverse head-and-shoulders pattern on September 10, the price level has held strong. As long as Bitcoin remains above $114,900, the immediate target price stands firm at $120,800.
However, technical indicators hint at the possibility of a dip toward $114,900 in the near term. The Relative Strength Index (RSI) has shown a hidden bearish divergence, wherein Bitcoin’s price formed lower highs while the RSI produced higher highs. This situation typically suggests that momentum is slowing, potentially leading to a brief 2% pullback, which aligns closely with immediate support levels.
Should Bitcoin’s price fall below $114,900, there could be further declines, potentially reaching toward $110,000. A daily closing under that threshold would significantly weaken its bullish structure and raise concerns among investors.
Final Observations
While Bitcoin’s current price movements and patterns suggest a potential path toward higher valuations, the underlying market dynamics, particularly among larger and younger holders, indicate caution. Traders and investors will need to keep a close eye on these signals as they navigate the complex landscape of cryptocurrency trading.
