After reaching its new yearly high of $35,000 on October 24, Bitcoin’s price has been trading sideways. It managed to maintain trading around this high and is now back slightly below the level.
With some new on-chain evidence suggesting investors’ interest, there are reasons to believe it can continue rising to a new high. Can the BTC price make it to its next resistance at $38,600?
Bitcoin‘s on-chain data suggests that significant investors, often referred to as whales, have been active during its recent surge above $35,000. According to blockchain analytics company IntoTheBlock , there were 23,400 transactions on the Bitcoin blockchain involving transfers of $100,000 or more in BTC, marking a yearly peak, as reported last week.
This peak occurred on October 24 and has since decreased to 12,230, but it continues to reflect a bullish sentiment.
Analyzing the distribution of holdings, there is a noticeable 4.85% increase in the category of large holders with holdings ranging from 10,000 to 100,000 BTC. This surge in supply distribution among whales has been observed since its peak on October 24, suggesting that whales have been accumulating the coin at these levels and are now likely providing price support.
Analyzing Bitcoin’s price, the chart suggests there’s room for a potential growth. The recent uptrend started on October 12 appears to be forming a five-wave pattern, with the last high on October 24 being the wave 3.
The sideways movement observed since the peak likely represents a consolidation phase, considered wave 4, preceding a potential upward surge that would mark the anticipated completion of wave 5.
This forthcoming ascent could approach just below the $40,000 mark, in alignment with a significant resistance level at $38,600. However, as this might conclude the final wave of a trend that commenced on November 21, a substantial decline could ensue.
Should this signal the initiation of a new bullish phase following an extended downtrend, the next crucial step would be establishing the first higher low in this bull market. This may manifest as an ABC correction, signifying a higher-degree wave 2. Ideally, this dip should not dip below $25,000.
If the price nears the projected $40,000 peak and then experiences a 38% decline, it may prompt short-term traders to reevaluate their investments. Conversely, it could provide more favorable entry points for long-term holders and potentially stimulate another buying surge, essential for the next significant upswing.
In the short term, bullish momentum is likely to prevail in surpassing the current local resistance at the last high. Following an encounter with the $38,600 level, we will reevaluate our projections. However, for now, a more substantial downward movement is anticipated afterward.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.