Bitcoin’s price pulled the $ 40,000 support level, but when it pushes the rally to a new all-time high, the possibility of another sharp sell-off is.

The mega whales crashed when bitcoin hit $ 40,000 on January 7, according to analysts from Material Indicators, a think tank for crypto analysts. This led to a rapid 10% drop to $ 36,000 over the next few hours.

The drop was bought quickly and the price eventually rose to over $ 41,000 within the next 12 hours. However, BTC is down again after hitting a full-time high of $ 42,000, and the leading digital asset is trading at $ 40,800 at the time of writing. Physical indicators:

“So it appears that the mega whales started selling after the reset at 02 UTC and continued to sell into the volcanic eruptions. I think they expected a bigger downside. They did not even participate in the rally to 42 km, which in turn confirms this view.”
During a recent draw of $ 42,000 to $ 40,000, analysts at Material Indicators explained that baby whales valued at $ 100,000 and $ 1 million are starting to make money. Notes:

However, they are now starting to buy again. It should break the 42k resistance. Only this time it looks like regular whales ($ 100 to $ 1 million bills) are starting to earn. ”

Bitcoin heat map. Source: Physical Indicators.
With the bitcoin price spiking on Coinbase from time to time over the past week, it’s clear that there have been a lot of bids in the US.

This indicates that there is a battle between the regular profit whales and new buyers in the US market. The sharp rejection of each new record high also indicates that whales can reap big profits when Bitcoin reaches a new record high.

Therefore, it is important to maintain the demand for bitcoins from the United States in the short term. Otherwise, the elevated pressure level of whales may lead to a correction in BTC in the foreseeable future.

Where could Bitcoin go next?
Bitcoin is currently enjoying a very strong technical momentum which continues to increase the price. For this reason, traders are unwilling to sell it, but some are starting to turn a profit.

In the short term, one of Bitcoin’s problems is the potential to recover in the US dollar. A trader under a pseudonym known as Cantering Clark indicated the recovery of the US dollar and the fall in precious metals’ prices. He said:

“So the question is, when the US dollar suddenly sinks and metals react with a nuclear attack, does $ BTC remain?”
The US dollar index (DXY) is hovering around the monthly support level. Alternative value stores like Bitcoin and Gold are priced against the dollar. Therefore, if the dollar begins to rise, the risk of a BTC correction may increase.

Source: CoinTelegraph