Bitcoin Bulls Defend $40,000 Support
Bitcoin (BTC) price is trading above $41,000 after bulls stepped in to prevent a reversal below $40,000. On-chain signals suggest that the sell-off may not be over yet. Investors are keen on avoiding amplified losses that could result from losing the $40,000 support.
Bitcoin Miners Reduce Reserves to 3-Year Low
Bitcoin miners have been on a historic selling frenzy, offloading about 10,000 BTC from their wallets between January 16 and January 22. Their reserves have dropped to the lowest level since August 2021. This selling pressure could trigger panic among other stakeholders, including retail investors. The coins sold over the past week are worth approximately $4.1 billion.
Investors Accumulate Coins on Exchanges
Bitcoin exchange reserves data indicates that investors have deposited 4,000 BTC into crypto exchanges between January 16 and January 22. This suggests that some investors may be looking to exit or swap out their coins on short notice. The increase in exchange reserves could lead to another price downswing for BTC unless there is a major shift in market sentiment.
Prediction: Bitcoin Price Could Drop Below $40,000
The reduction in Bitcoin miners’ reserves and the accumulation of coins on exchanges point to a bearish outlook for Bitcoin price. If the $40,000 support level is breached, BTC price could rapidly slide toward $38,000. However, if Bitcoin price reclaims $45,000, it could invalidate this bearish forecast.
Hot Take: Bearish Sentiment Looms as Bitcoin Miners Sell Off Reserves
The recent selling frenzy among Bitcoin miners, coupled with increased deposits on exchanges, indicates a bearish sentiment for Bitcoin. The sell-off could trigger panic among retail investors and potentially lead to a drop below $40,000. However, if Bitcoin price manages to reclaim $45,000, it could signal a bullish reversal. The next few days will be crucial in determining the direction of BTC price.
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