It has been a rough past few days for Bitcoin, with the cryptocurrency seeing immense sell-side pressure as bears aim at erasing the gains that have come about as a result of the recent uptrend.
Where the cryptocurrency trends next will depend largely on whether or not it sustained its recent break below its $17,000 support level.
If bulls cannot reclaim this level in the near-term, it could mean that a decline towards its multi-week support at $16,200 is imminent. If this level is broken, it could strike a serious blow to the cryptocurrency’s technical outlook.
One on-chain analyst is pointing to a disturbing trend that could indicate downside is imminent for BTC.
He notes that whales are depositing BTC into exchanges rapidly, which nearly always indicates that a flurry of sell-side pressure is imminent.
Until trading activity amongst these large Bitcoin investors dies down, he concludes that it will either see sideways trading or slide lower.
This comes as investors are already on edge, with mounting regulatory concerns and the recent $19,500 rejection both striking blows to its underlying strength.
Bitcoin Struggles to Gain Momentum as Bears Take Control
At the time of writing, Bitcoin is trading down just under 3% at its current price of $16,700. This marks a rebound from daily lows of $16,500 but a decline from highs of over $17,000.
Where the entire market trends next will depend largely on whether or not BTC can stabilize around its current price region or if it can push higher in the days ahead.
Any continued decline from here could strike a serious blow to its technical outlook, potentially causing it to see some serious mid-term losses.
This On-Chain Trend Spells Trouble for BTC
One analyst explained that a surge in trading activity amongst Bitcoin whales indicates that further downside could be imminent in the days and weeks ahead.
“BTC Whales are depositing to exchanges. I expect dumping in the short-run. All Exchanges Inflow Mean (144-block MA) hit 2 BTC. I think we’re in a danger zone. The price is likely to go sideways or down when whales are active on exchanges.”
Image Courtesy of Ki Young Ju. Source: CryptoQuant.
If whales begin taking profits and offloading their holdings, this could place some immense pressure on Bitcoin’s recent uptrend.
OKEx resuming BTC withdraws could also add some pressure to the cryptocurrency’s near-term outlook.
Featured image from Unsplash. BTCUSD price data from TradingView.