FX.co ★ Bitcoin: reasons for Tuesday rally, controversial wedge and trend, and two predictions for short term

Bitcoin rose on Tuesday, despite the fact that it had consolidated under the local border of 46,934.61 the day before. Nevertheless, this upward momentum was stopped by the resistance level of the downward channel. And if the day closes below the level of 47,848.69, then the scenario of a decline in BTCUSD to the area of $42,000 per coin does not lose its relevance.

Holders don't panic, speculators sell

According to a recent report by crypto analytic platform Glassnode, the Bitcoin network has seen a noticeable decline in the percentage of profitable positions. Almost 76% of BTC companies are currently in positive territory. In November 2021, there were more than 95% of them.

This indirectly suggests that long-term holders of bitcoins continued to hold their crypto assets during the market fall. And short-term holders at this time panicked and sold bitcoins in large quantities. As a result, realized losses increased sharply.

Why Bitcoin has grown: speculation or the beginning of a new impulse?

Tuesday's growth, especially considering the decline in positions by the end of the day, was exclusively local. At least the following data allow making such conclusions.

Bitcoin blockchain saw two major transactions as the market began to recover and the main cryptocurrency added 7% to its value in less than 24 hours.

According to the Whale Tracker Twitter bot, more than $1.2 billion of BTC was transferred from just two unknown wallets. The first transaction, worth $736 million, appeared on the chain at 11:11 UTC and was sent to a wallet that currently only holds funds received, without any additional transactions before or after.

Also, it was not noticed that the sender's wallets received any previously recorded transactions and do not store any funds other than those that were sent earlier.

The second transaction was made from a wallet with a large number of entries from different addresses in the blockchain. But the recipient's wallet address is another "empty" address, in which only one transaction is recorded.

Most likely, these two transactions were part of an internal funds transfer or OTC exchange, since both addresses do not have exchange tags.

Downward channel or wedge?

From a technical point of view, the situation looks ambiguous. On the daily and 4-hour charts, we see a downward channel marked with green dashes. But if you look closely at the 4-hour chart, all this consolidation movement looks like a wedge (marked with red lines).

If we evaluate the downward trend, then its resistance, which has stopped the current rise in prices, gives a clear signal of a further decline. But if we consider the wedge, the price went up from it during Tuesday's impulse. This means that a rollback to its resistance is now possible, and if it is confirmed by a rebound, as well as the mirror level of 47,848.69 as a support, then there is a chance to return to growth for BTCUSD.

We will be able to understand what worked out of these two patterns after determining the price relative to the zone between the levels of 46,934.61 - 47,848.69. This will determine the direction and immediate targets. But for now, it is hard to count on growth above $55,000 per bitcoin.