A swift recovery from Bitcoin and altcoins are signals that BTC may have bottomed at $17,650.
Bitcoin’s (BTC) sharp correction to $17,650 came as no surprise to investors and many expected the digital asset to fall as low as $16,000. Thus, the quick recovery back to $18,600 is intriguing and it bolsters the popular belief that retail and institutional investors are keen to purchase every BTC dip.
Although the possibility of another drop remains, three factors point toward a Bitcoin bottom at $17,650. The factors are, whale deposits hitting a peak, BTC posting a quick recovery, and trading volume picking up again.
Whale deposits hit a peak
According to CryptoQuant CEO Ki Young Ju, whale deposits hit a peak earlier this week. Typically, when the All Exchanges Inflow Mean indicator reaches a top, a rally follows afterward.
Whales pose the biggest threat to Bitcoin’s short-term performance because they can place immense selling pressure on the asset in a short period. Hence, when fewer whales are able to sell, it is bullish for BTC. Ki wrote:
“BTC All Exchanges Inflow Mean (7d MA) hit the eight-month high since March when the price hit the year-low. Very bullish in the long-run.”
Based on various factors, Ki said that Bitcoin could drop lower, but buying BTC at the current level is more attractive. He said:
“BTC could fall further, but I think it’s better to play long here and put up with drawdown. Longed at $18,280. I’ll post some bullish charts showing we can $20k at the end of this year. (or early next year, I think).”
Bitcoin price rebounds swiftly
After a noticeable spike in buy volume, Bitcoin posted a quick turnaround and rallied toward the 20-day moving average.
BTC first claimed $18,000 as a support level, then made its way toward $18,2600 before pulling back to the $18,500 range. The continued recovery of BTC without major corrections indicates the market remains resilient and in favor of bulls.
Initially, Cointelegraph reported that altcoins took the biggest hit as the price of Bitcoin abruptly dropped below $18,000. But the BTC recovery has been aided by the strong rebound of altcoins like Ether and XRP.
This trend suggests that investors are seeking higher-risk plays, which is indicative of the growing certainty in the market.
BTC trading volume rises
Analysts at Santiment, an on-chain analysis firm, found that the volume of Bitcoin sharply rose after the recent pullback.
When Bitcoin recovers with a significant increase in volume, it signifies growing confidence from traders in the near term. The analysts explained:
“Looking at how trading volume has compared for the four most discussed #crypto assets, $BTC has risen as prices dropped to below $18,000 for the first time in 11 days. Also, $XRP is edging closer to overtaking $ETH again in anticipation for the airdrop.”