Bitcoin (BTC) is fighting strong resistance at $28,000
BTC seems to have hit a roadblock as the price stagnated at $28,000 this past week. A frenzy of profiteering among long-term Bitcoin holders and declining whale activity pose roadblocks to the ongoing rally. Can the bulls remain resilient?
Bitcoin bulls face stiff resistance in the $28,500 zone as long-term owners sell.
Bitcoin long-term owners are selling
BTC has had a positive start to the year, ranking as the best-performing asset class for Q1 2023. However, macro factors such as US prosecutors’ impending auction of seized 40,000 Bitcoins have coincided with critical bearish on-chain signals posing a roadblock to the ongoing the price increase.
A selling frenzy among holders who had bought since mid-2022, when BTC was last around current prices, poses a major concern. Rising values of Age Consumed have been recorded on the Bitcoin network, according to Santiment. After a largely neutral start to the year, the old-age consumption indicator began to rise in early March 2023.
The chart below shows how Bitcoin Age Consumed rose from 2.57 million on February 25th to 13.21 million at the beginning of April. Notably, it recorded its 2023 high of 24.48 on March 7.
Age Consumed is a metric that tracks previous sleeping or prolonged movement on specific dates. It measures the total number of days since each traded coin was last moved between addresses, this is then multiplied by the time since they were last moved. An increase in age consumption may indicate that long-term owners are beginning to sell their coins.
The sustained increase could lead to an oversupply of the BTC market and trigger price corrections, especially around milestone prices.
BTC Large transactions on the way down
Likewise, another concerning on-chain signal is the relative decline in large BTC transactions. According to IntoTheBlock, the number of large transactions involving BTC has been on a downward trend since BTC crossed $25,000.
As shown below, between March 14 and April 2, large Bitcoin transactions decreased from 21,000 to 11,640 transactions.
A decline in large transactions indicates a lack of demand and confidence from large investors. It is a bearish signal considering how large transactions add liquidity to the Bitcoin market. A prolonged decline could potentially cause a price decline in a mild liquidity squeeze.
In summary, bearish concerns could grow if long-term owners continue to take profits and whales remain MIA. BTC may experience more retracement before finally breaking above the $30,000 milestone.
BTC Price Prediction: Another drop below $27,000 beckons.
BTC’s journey to $30,000 could be rocky, according to chain data from IntoTheBlock. The In/Out of Money Around Price (IOMAP) data below shows that BTC holders can expect another retracement below $27,000 in the coming weeks.
In particular, there is significant resistance for Bitcoin in the $28,500 zone. Here, the data shows that 1.37 million addresses appear to be actively profiting from their 821,000 coins.
If the selling continues, BTC could go back to find support at $26,800. This is the average price at which 310,000 addresses had bought 250,000 BTC.
Still, the bulls could grow in confidence if BTC rises above $28,700. This is the maximum price at which the resistance army of 1.37 million had bought 821,000 bitcoins. A break above this zone could see BTC approach $30,300 with relative ease.
Disclaimer
In line with Trust Project guidelines, this price analysis article is intended for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, objective reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.
