FX.co ★ Bitcoin drops by 20% but whales continue to hold BTC despite correction

Over the previous few days, bitcoin's correction reached its peak, and the cryptocurrency instantly fell below $56,000. This has raised some concerns, but the asset continues to follow a bullish scenario. The main negative side of this decline is that after reaching an all-time high near $70,000, the quotes of the asset drifted lower by 20%. The market froze in expectation of the second wave of massive sale-off due to such a significant correction. However, it appears that the current situation proves that the bitcoin market has become mature and investors are ready to face such conditions.

The main reason for optimism is Glassnode's research, according to which long-term holders of bitcoin still believe in price growth. This research is supported by statistics that indicate that whales sold just 0.7% of the total BTC volume. That percentage is equivalent to about 100,000 coins, with large total holdings in the amount of 13 million BTC. The sales are an impulse profit taken by long-term investors who are sufficiently in the black. Meanwhile, total institutional investor holdings represent more than 81% of the total market supply, of which only 3% were bought at a loss as of November 19. At that time, retail traders held over 18% of bitcoin volume, 8% of which was purchased at a loss, indicating short-term holdings and a market entry above $60,000.

The research indicates that the majority of cryptocurrency investors are already in substantial surplus. This is also confirmed by the onchain metrics of the market ratio and value of the coin, according to which the majority of BTC holders have favorably acquired the asset. At the same time, Glassnode experts note the absence of even a local sell-off, which indicates that the market is unwavering in its desire to reach new highs well above the current positions. This pattern is a strong bullish signal and this trend may worsen in the near future, as the cryptocurrency is in the range where the price is likely to rebound. Market sentiment can be tracked most clearly with a metric indicating a coin migration. An increase in the number of transactions means the beginning of a profit-taking campaign. This is unlikely to happen in the nearest week, because the market may grow above $70,000. The probable potential of price movement in November is still expressed in the value of $75,000.

At the same time, bitcoin is far from recovery growth, despite the appearance of the first impulse bounce attempts. On the four-hour chart, the asset looks uncertain and the situation is rather bearish. The price is moving below the supertrend line, which is evidence of sellers' dominance, and the main technical indicators show uncertainty: the MACD indicator is moving below the zero mark without decreases and increases, which indicates the absence of buyers' activity. The stochastic oscillator and the RSI are near a bullish zone, but the predominance of bears prevents the indicators from entering the safe zone. As of 1 p.m., bitcoin quotations approached and rebounded from the 0.5 Fibonacci level, where a local support zone was also situated.

On the daily chart, a downtrend was formed as BTC made a bearish breakout of the supertrend line, which is similar to the September trend. At that time, the breakout was accompanied by two red candlesticks in a row with lower wicks, which indicates an increase of pressure from bulls. It was a similar pattern that appeared on the charts on November 19 and that might indicate that a pullback is about to happen. However, the decline is likely to continue, as indicated by the technical indicators, which are declining without any sign of reversal or stabilization. Lack of signs of possible price stabilization is extremely important, as the coin is trying to stay in the support zone around $56,500. The downward movement of technical metrics indicates a further decline of bitcoin. Taking this into account, the key support zone for bitcoin is still near $53,500, where the price is likely to rebound. This is indicated by players' patience and price reaction to strong support zones. And the range near $53,600 will be a very profitable entry point into the market.