Bitcoin (BTC) recently experienced a remarkable surge, pushing its value above the $35,000 mark. This October, BTC has demonstrated an impressive 30% gain, bringing its Year-To-Date (YTD) performance close to a 100% increase.
Nonetheless, Julio Monero, the head of research at CryptoQuant, suggests that a pause in BTC’s rally may be imminent. Monero supports this prediction by highlighting the growing trend of Short-Term Holders (STHs) selling their coins for profit in recent times.
Should profit-taking among STHs persist, there is a possibility that BTC could dip below the $34,000 threshold. Intriguingly, while STHs continue to offload their holdings, large-scale investors, often referred to as whales, have been actively acquiring Bitcoin. Monero notes that these significant players are on the cusp of exceeding the high-level distribution seen back in June. In light of these factors, BTC faces the risk of depreciating from its current valuation.
The Time for Profit-Taking
A glance at the BTC/USD 4-hour chart appears to corroborate the notion that the rally might be losing steam. This is discernible through the decreasing Awesome Oscillator (AO), indicative of diminishing buying momentum and a significant portion of the market capitalizing on gains accrued over the past month.
Meanwhile, bullish investors seem to be establishing a support level at $33,698. Unless sellers manage to undermine this level’s strength, BTC is unlikely to experience a drop of more than 10% to 15%, regardless of any selling pressure.
Simultaneously, there exists a resistance level at $34,895, which traders should keep a close watch on. Breaking through this resistance would necessitate a substantial influx of buying pressure.
Opting for the Long Side
The Accumulation/Distribution (A/D) line has also been on the rise, potentially debunking the bearish scenario and paving the way for an upward breakout. Consequently, it appears that any impending decline in Bitcoin’s value may be short-lived, with a potential rebound to $35,000 looming.
In the realm of derivatives, Coinglass data reveals that traders are favoring a bullish stance on Bitcoin. This inclination is evident in the long/short ratio, which offers a collective snapshot of market sentiment.
A long/short ratio exceeding 1 signifies a prevailing bullish sentiment with more positions leaning towards the upside. Currently, the Bitcoin long/short ratio stands at 1.16, underscoring traders’ confidence in an impending BTC recovery.