The Bitcoin market is currently at a critical juncture, hovering above the psychological level of $85,000. Apart from psychological plausibility, this important support also appears to have technical importance. Therefore, the market may test its strength before showing any directional momentum. However, recent analysis has revealed a grim picture regarding the future of the main cryptocurrency.
Forming a descending triangle with support near $85,000
In a recent post on QuickTake, CryptoOnchain revealed that there was the emergence of a classic technical pattern indicating bearish continuation intent for the asset. This pattern, which exists on Bitcoin’s daily timeframe, is characterized by a series of swing lows and highs as the price compresses against the horizontal support that serves as the base of the triangle.
Interestingly, the price level known as the Point of Control (POC) (where there is the most trading volume) is also located near the $85,000 support. This further reinforces the importance of price level. If this price level is decisively breached, Bitcoin prices could fall rapidly as a liquidation or capitulation event is likely to follow. We could see increased downside pressure, especially if there is little or no demand to reassert bullish momentum.
Exchange activity falls to multi-year low
CryptoOnchain supports his bearish hypothesis with another notable on-chain observation. The metric here is the Bitcoin Exchange Withdrawal Transactions (7-day Moving Average) metric, which monitors the number of on-chain withdrawal transactions made from crypto exchanges over a 7-day period.
The analyst highlighted that the index’s readings have fallen to a level of around 5,000, the lowest since 2016, about nine years ago. Interestingly, this current level is below what was measured during past bear markets (2018, 2020, and 2022). Exchange withdrawal activity provides insight into investor confidence and accumulation behavior. Since coins sent from exchanges are typically stored in private wallets, increased withdrawal activity means a greater desire to accumulate and increased trust.
Conversely, this significant drop in exchange withdrawal activity indicates a deep sense of apathy among Bitcoin investors, or a lack of belief that is important for long-term holding. Apart from the obvious lack of urgency to get coins into private wallets, the low reading from this indicator also reveals that investors are not actively accumulating BTC. Analysts concluded that “the data suggests widespread skepticism and exhaustion, and there is little real non-speculative demand.”
if The $85,000 support fails and with no interested buyers, Bitcoin price could fall quickly. At the time of writing, Bitcoin is worth $87,410, but there has been no real movement since the past 24 hours.
Featured images from Pexels, charts from Tradingview
