Launching in 3, 2… Here’s why Bitcoin breaking $40,000 is different than last time

Launching in 3, 2... Here's why Bitcoin breaking $40,000 is different than last time

The price of Bitcoin (BTC) broke above $40,000 on Feb. 6 for the first time in 23 days. But this time, the market sentiment is a lot calmer with a less overheated derivatives market.

The combination of a less crowded Bitcoin futures market, the selling pressure from whales peaking, and a fast recovery could help BTC stabilize above $40,000 this time.

Bitcoin recovers quickly after whales finish selling

On Jan. 29, a pseudonymous Bitcoin researcher and analyst known as “Material Scientist” said that “mega whale” order flow reached an all-time high.

This means that the selling pressure coming from whales dealing with $1 million to $10 million orders reached a record-high. The analyst said at the time:

“Whales bought back almost everything they had sold since $40k, and mega-whales are about to make a new ATH on their orderflow. Downtrend is over, IMO. New ATH soon, don’t miss it!”
Launching in 3, 2... Here's why Bitcoin breaking $40,000 is different than last time
Bitcoin exchange data with whale orders (brown line). Source: Material indicators

If the price of Bitcoin establishes $40,000 as a new support area, it would establish a highly positive short-term price trend for BTC.

It would mean that BTC can now rally towards its all-time high without the massive selling pressure coming from major whales and high-net-worth investors.

In the near term, for Bitcoin to maintain its bullish structure, it would need to protect two key support levels: $40,000 and $37,834.

Meanwhile, according to the analysts at Whalemap, a data analytics platform that tracks whale data, there is a confluence of whale supports at $37,834 and $36,290.

If Bitcoin breaks down from $40,000, these two support areas would be critical to defend. Below these two levels would likely result in a short-term bearish trend. The analysts wrote:

“Confluence of whale supports at $37834 –> $36290. A new cluster formed yesterday in that area too. This should give BTC a nice base to take off from if we ever get there. Otherwise $39843 should provide some help too.”
Launching in 3, 2... Here's why Bitcoin breaking $40,000 is different than last time
Whale cluster support levels. Source: Whalemap

What comes next?

In the foreseeable future, some traders anticipate Bitcoin to surge beyond $60,000 with the momentum from the ongoing rally.

Scott Melker, a cryptocurrency trader, said there will be pullbacks, but Bitcoin would likely reach $63,000 following the breakout. He said:

“There will be pullbacks, maybe even to retest the top of the flag as support. But technically this is a confirmed breakout that should take $BTC to 63K eventually. Disclaimer – patterns rarely reach their targets, but the rules are the rules.”

Bitcoin technically broke out of the bull flag when it surpassed $38,000 on Feb. 4. Considering that Bitcoin is looking stronger than the last time it broke $40,000 a month ago, there is sufficient momentum to carry it past $50,000 this time around.

A potential catalyst in the near term could be Guggenheim potentially confirming its investment in Bitcoin after securing the rights to invest in the Grayscale Bitcoin Trust in February.

Title: Launching in 3, 2… Here’s why Bitcoin breaking $40,000 is different than last time
Sourced From: cointelegraph.com/news/launching-in-3-2-here-s-why-bitcoin-breaking-40-000-is-different-than-last-time
Published Date: Sat, 06 Feb 2021 14:00:00 +0000

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Jason Basler

Jason Basler– Financial Updates My Name is Jason Basler and I am also the main source from the ‘Topnewsscoop.com’ of all the exclusive and most delicate visualization of the activities in the business sector. My first step towards this journey was taken in the very early years of my life. I started with an independent financial consultant. However, I only had almost 4 years of skills and experience in this market. I have always been a free personality and like to fly one place to another, to explore more and more. Moreover, this passion and craze of traveling gave me a chance to report a section for best news associations. Last but not least, I am presently working full-time as an editor. Address: 4830 Crim Lane Dayton, OH 45402, United States of America Phone Number:  +1 937 727 7917 Email: [email protected]

Leave a Reply

Your email address will not be published. Required fields are marked *

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together