A few days ago, it became clear that Bitcoin (BTC) is in a price-RSI divergence pattern. This was a sign of relative weakness in a bearish trend that would give way to a correction. Fast forward to the present and that pullback is here but the bears are also showing some weakness right now.
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Bitcoin’s price of $23,909 at press time was down 5.4% from its most recent high, which was also the current high in 2023. This may not be much in a grand retracement pattern, but it does indicate low selling pressure. This is not surprising given the bullish expectations in the market.
If Bitcoin held its press time pattern, the next buy wall would be expected near the $23,500 price level. This was the same price range where the price rebounded on February 16 and the same level previously acted as a resistance range. There were a few key observations that perfectly summed up BTC’s performance.
The characteristics of the exchange flow reveal this in the case of Bitcoin
Bitcoin exchange flows have been tilting in favor of the bears for several days now. However, the sales pressure dropped significantly each day. The latest Glassnode alerts tracking daily on-chain flows reveal that Bitcoin net flows for February 24 were -$29.5 million.
📊 Daily chain exchange flow#Bitcoins $BTC
➡️ USD 687.8 million in
⬅️ $717.3 million spent
📉 Net flow: -29.5 million USD#Ethereum $ETH
➡️ $363.8 million in
⬅️ $341.2 million spent
📈 Net flow: +22.6 million USD#Tether (ERC20) $USDT
➡️ USD 587.7 million in
⬅️ USD 659.8 million spent
📉 Net Flow: -$72.0M https://t.co/dk2HbGwhVw
— glassnode alerts (@glassnodealerts) February 24, 2023
The same tracker revealed that Bitcoin had a net flow of -$40.1 the previous day and +$52.9 million the day before. This confirmed the return of overall selling pressure, but it slowed down at press time. This was confirmed by the measure of foreign exchange inflows, but foreign exchange outflows also had a similar effect.
The latest data on foreign exchange flows show that outflows were slightly higher than inflows. Open interest has also been declining over the last few days but has leveled out at the time of writing. The potential turnaround in demand for derivatives could be on the cards.
How much is 1 10 100 BTC worth today?
Are the bulls ready to take over?
Perhaps looking at where most of the purchasing power comes from can provide useful insights. Bitcoin supply distribution reveals addresses holding between 1,000 and 10,000 BTC rotated during yesterday’s trading session and accumulated at press time.
This observation was important because the same address category controlled the largest supply of BTC in circulation. The reason why the upward movement has not started despite this observation is that addresses holding more than 10,000 BTC do the opposite, thus contributing to selling pressure.