The crypto industry hit a rough patch last week as BTC price declined 10% after clearing $30,000 for the first time in 10 months. But with multiple on-chain metrics flashing green signals, it appears that the Bitcoin bulls could soon reverse the retracement. But when will Bitcoin be back above $30,000?
Bitcoin price has declined 10% in the past week, but multiple on-chain indicators suggest that a $30,000 rebound is more likely than a plunge below $25,000. As investor confidence in the broader crypto industry contracts, investors are likely to reallocate funds from the altcoin sector to Bitcoin in the coming days.
Investor Confidence Has Hit A One-month Low.
The market sentiment surrounding Bitcoin hit euphoric levels on Mar. 12, in the aftermath of the US banking crisis. However, since the BTC price crossed $22,000, investor confidence has declined steeply, leading Bitcoin weighted sentiment to reach its lowest since Mar. 2.
Weighted Sentiment evaluates investors’ expectations by comparing the ratio of positive mentions of an asset to the negatives across relevant social media channels.
Looking at the chart below, Bitcoin weighted sentiment turned negative after declining from 1.53 to -0.70 between Apr. 11 and 24.
Declining social sentiment, combined with an increase in selling pressure, can lead to a temporary decline in the price. However, once the negative sentiment reaches a dysphoric peak, it could signify the end of the sell-off frenzy and the start of a new bullish cycle.
And historically, the price has typically moved in the opposite direction of investors’ extreme social expectations. If this pattern reoccurs here, Bitcoin price could experience a rebound in the coming days.
Strategic BTC Whales Are Buying
On a more bullish note, a cohort of whales whose wallet balances exhibit the highest correlation with BTC price movements appear to be entering another accumulation phase.
The rejection by the $30,000 resistance has triggered a network-wide sell-off across the Bitcoin ecosystem in the past week. But on-chain data reveals how crypto whales holding 100 to 1,000 BTC have been buying the dip.
The chart below depicts that they added 20,000 BTC to their wallet balances between Apr. 16 and 24.
At current market prices of $27,400, the new investment from these price-savvy whales is worth nearly $540 million. When large institutional investors make such a significant inflow within a short period indicates growing confidence.
Considering their history of timing purchases just before a rally and their influence on retail investors, such a significant investment from the abovementioned whales will likely culminate in a bullish reversal for Bitcoin.
BTC Price Prediction: Bitcoin Must Reclaim $28,300 to enter a Bullish reversal
Thirdly, IntoTheBlock’s In Out of Money Around Price data shows that Bitcoin is unlikely to drop below $27,000.
Currently, the $27,500 resistance cluster of 61,000 addresses holds 13,500 BTC. This zone is relatively weaker than the support of 252,000 addresses that had bought 389,000 BTC for an average price of $27,100.
To enter a bullish reversal, BTC must clear the next resistance zone at $28,350. However, the cluster of 1.98 million holders with a bag of nearly 756,000 BTC will present a formidable challenge. But if that resistance level is broken, BTC could rally as high as $32,000
Still, the bears could invalidate the positive outlook if BTC slips below $27,000. Although, as seen above, the bullish support from 252,000 addresses that had bought 389,000 BTC for an average price of $27,100 will likely prevent the drop.
But if that support level fails to hold, Bitcoin’s price could drop as low as $24,500 before the bulls can regroup.
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