Bitcoin price volatility spikes as BTC whales sell each new high

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Bitcoin price has returned to the $ 40,000 level as support, but as the bull pushes for a new all-time high, another sharp sell-off threatens.

According to analysts at Material Indicators, a cryptanalyst firm, megawales sold heavily when Bitcoin hit $ 40,000 on Jan. 7. This resulted in a rapid 10% drop to $ 36,000 over the next few hours.

The dip quickly bought out, pushing the price above $ 41,000 over the next 12 hours. However, BTC saw another sharp drop after hitting another all-time high of $ 42,000. At the time of writing, the top ranked digital asset is trading at $ 40,800. According to material indicators:

“So it looks like mega whales started selling after that dump around 2:00 a.m. UTC and resold the spikes. I suspect they expected more cons. They didn’t actually take part in the rally until 42km which would further support this point. “

In the recent retreat from $ 42,000 to $ 40,000, Fred stated that smaller whales holding $ 100,000 to $ 1 million were starting to take profits. He noticed:

“But now they have started buying again. Presumably to break the 42k resistor. Only this time, it seems the normal whales ($ 100,000-1 million US) have started taking profits. “Bitcoin heat map. Source: material indicators

Considering the fact that Bitcoin price has traded higher at times on Coinbase over the past week, it is clear that there is great demand from US buyers

This suggests that there is a battle between regular profit-taking whales and new buyers in the U.S. market. The sharp rejections of each new all-time high also signal that whales may aggressively take profits once Bitcoin hits a new record high

Therefore, it is important that the demand for Bitcoin from the US continues in the short term. Otherwise, the high pressure to sell from whales could lead to BTC seeing a correction for the foreseeable future.

Where could Bitcoin go from here?

Bitcoin currently has extremely strong technical momentum that is driving the price even higher. Because of this, traders are reluctant to sell it, but some have started taking profits.

In the short term, a problem for Bitcoin is the potential recovery of the US dollar. A pseudonymous trader named “Cantering Clark” pointed to the recovery of the US dollar and the decline in precious metals. He said:

“So the question is, will the $ DXY surprisingly find a bottom and metals will respond by being treated with nuclear weapons. Is $ BTC holding up well?”

The US Dollar Index (DXY) is moving at a support level on the monthly chart. Alternative stores of value such as Bitcoin and Gold are valued against the dollar. If the dollar moves higher, the risk of a BTC correction could increase.