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Bitcoin Rebounds, Faces Pressure as Long-Term Holders Start Selling

  • Bitcoin rebounded above $70,000 after a drop, amid growing ETF outflows and anticipation of ETN markets by the London Stock Exchange, yet long-term holders taking profits could dampen the momentum.
  • Long-term Bitcoin investors are increasing selling pressure, with daily realized profits exceeding $2.6 billion, leading to potential price fluctuations and a challenging environment for sustaining the recent recovery.
  • Despite a bullish outlook with Bitcoin potentially moving towards the $74,000 liquidity zone, technical indicators like the RSI and AO suggest weakening buying pressure and a growing bearish sentiment, which might reverse the upward trend.
Bitcoin

Bitcoin (BTC) has recently shown resilience, climbing back above $70,000 (R1,326,500) after dipping to the $62,000 (R1,174,900) vicinity. This recovery is paralleled by a noteworthy increase in outflows from spot BTC exchange-traded funds (ETFs), even as the London Stock Exchange explores creating a market for Bitcoin and Ethereum Exchange-Traded Notes (ETNs).

Despite this promising rebound, Bitcoin’s ascent is hampered by long-term holders opting to take profits. Currently, BTC’s price is fluctuating between $69,000 (R1,307,550) and $70,700 (R1,339,765), following a dip that presented a prime buying opportunity linked to early March’s bullish momentum.

Glassnode’s analysis reveals that the pressure to distribute among BTC’s long-term investors is intensifying, fueled by a surge in realized profits—exceeding $2.6 billion (R49,270,000,000) daily—as they capitalize on recent gains. This distribution pressure, characterized by increased selling, threatens to dampen Bitcoin’s price progress due to profit-taking and heightened volatility.

@CryptoCapo_ on X highlights a crucial liquidity zone ranging between $74,000 (R1,402,300) and $75,000 (R1,421,250), indicating a balanced presence of buyers and sellers that could stabilize price movements without causing significant fluctuations.

Looking ahead, Bitcoin maintains a bullish outlook, but faces rising volatility as many holders continue to realize profits. A decisive close above $69,000 could pave the way for BTC to challenge its monthly peak of $73,777 (R1,398,074.15) and potentially breach the $74,000 liquidity zone, potentially igniting further buying interest.

However, caution is advised as the Relative Strength Index (RSI) hints at weakening buying pressure. A drop below its signal line’s yellow band could signify a trend reversal, potentially driving Bitcoin’s price back down to the $62,000 region or even lower into another liquidity zone beneath $59,224 (R1,122,294.80).

Amid these dynamics, the market’s sentiment appears to be tilting towards caution, with the Awesome Oscillator (AO) displaying red bars, indicative of a growing bearish outlook. This sentiment underscores the delicate balance between securing profits and fostering long-term market stability, crucial for Bitcoin’s trajectory in South Africa and globally.

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