The $40,000 level has been met with a wall of selling and Bitcoin has duly retreated to lure sellers down to lower levels. As we head lower into a cluster of support, this weekend's trading session could see a wide trading range as key support sits $32,330.
This week's rally back to $40,000 has been matched by increasing levels of open interest. Generally, this is seen as a positive, as market participants continue to add new positions and increase existing — and those positions have historically had a positive effect on price.
After a couple of weeks of stabilization, exchanges' balances are pointing lower once more.
So where is all this Bitcoin heading? One of the great things about the blockchain is the transparency of the data flows—we can actually see where the Bitcoin goes. The below chart shows that 2.7M BTC are held in 'accumulation addresses,' basically the hodlers' chests. These addresses have had at least 2 incoming receipts of Bitcoin, and have never spent nor moved any.
We can assume they have no interest in selling at $40,000, along with another hodler who is now in possession over 600,000 Bitcoin.
Having touched $40,000, Bitcoin has failed to hold its gains. We have traded back down to $38,180 as the buying momentum slowed. It's likely those who missed the opportunity to sell at $40,000 the last time around will need to be filled before prices can advance.
It's possible that during the weekend trading session we move lower. With $35,868 the next area of support now, $38,180 has been breached. A move lower through $34,378 and $33,860 will see the market find strong support at $32,300.
On the upside, a move back above $38,180 will see Bitcoin once again focus on a new all-time high, but only once the sell orders at $40,000 are satisfied.
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