Over the last four days, the Bitcoin price dropped from $50,800 to $46,100, losing almost $4,700 in its overall valuation.
In the process, BTC managed to lose control of the critical $48,000 support level.
Why Is the $48,000 Support Important?
Popular crypto-journalist Joseph Young tweeted a few days back about the importance of the $48,000 line.
Here’s what I expect in the market. $48,000 is the key level for Bitcoin. If it stays above it as support, I think it goes to $56k~$60k. Continue to reject $48k will likely result in short-term consolidation / pullback to reach lower liquidity. Let’s pray for $48k+.
CryptoQuant CEO Ki Young Ju, also noted the importance of the $48,000 line reporting the Bitcoin outflow from Coinbase.
13k $BTC flowed out from Coinbase a few hours ago. It seems those BTC went to multiple Coinbase custody wallets. US institutional investors are still buying Bitcoin at the 48k price. This is the strongest bullish signal I’ve ever seen.
This adds further credence to the erstwhile $48,000 support line’s importance, which has since been flipped to a strong resistance barrier.
Is the Bottom At $44,000?
Ki-Young Ju had previously underlined the importance of the Coinbase whales, which are more often than not your institutional investors. In fact, it has been heavily speculated that Tesla bought their Bitcoins from Coinbase itself. As per the CryptoQuant CEO, these institutional whales use the $44,000-$48,000 to buy in. As such, it’s challenging for the price to drop below $44,000.
Coinbase Premium hit the all-time low -$1020 and then skyrocketed +$486. Remember who’s driving the market. Coinbase whales have been accumulating $BTC in 44-48k range. Even if there are more corrections, it’s unlikely to go down below 44k.
What’s Adding To The Selling Pressure?
Santiment, an on-chain analytics platform, noted that the number of whales is decreasing a little. This means that the whales have added more selling pressure to the Bitcoin price, which is forcing it to go down.
However, it’s not all doom and gloom.
As noted by Rafael Schultze-Kraft, the founder of Glassnode, the amount of illiquid Bitcoin supply has grown a lot more than its circulating supply, which means that the supply is continually decreasing while institutional demand keeps rising.
The amount of illiquid #Bitcoin supply in the network has grown more than the circulating supply since 2017. Meanwhile, liquid supply continues to see a steep decrease. Pair this with the demand from MSTR, Square, Tesla, Grayscale et al., and understand how bullish this is.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.