TLDR
- Bitcoin whales drop to a three-month low, signaling potential profit-taking.
- Exchange outflows decrease by 51%, hinting at waning buying intensity.
- RSI shows a bullish divergence despite slowing whale activity and outflows.
- Bitcoin faces resistance at $117,600, with support at $108,900 for further movement.
Bitcoin’s recent price surge has caught the attention of traders and analysts, as the cryptocurrency climbs 3.2% in the past 24 hours. While this is part of a broader 5% increase over the last month, some key indicators suggest the momentum could soon wane. Notably, whale activity has slowed, which might signal a potential pullback before Bitcoin reaches its next all-time high.
Whale Activity Drops Amid Price Surge
Bitcoin whales, large holders with more than 1,000 BTC, have shown signs of reducing their positions. Data indicates that the number of whale entities has decreased to a three-month low of 1,350 as of October 26. This shift has occurred since mid-October, with a noticeable dip around October 14, when Bitcoin’s price corrected from $115,000 to $106,400. The drop in whale entities points to profit-taking behavior, which has reduced the buying pressure from institutional players.
The reduction in whale activity is not the only factor impacting Bitcoin’s upward momentum. Bitcoin’s exchange outflows, another key metric, have also slowed significantly. From October 15, when outflows reached 111,720 BTC, the figure dropped by 51% to 54,643 BTC by October 26.
This drop in outflows suggests a decrease in buying intensity, as fewer coins are leaving exchanges for long-term storage. While there is still evidence of accumulation, the slowing pace could be a warning sign for potential short-term selling pressure.
RSI Shows Bullish Divergence Despite Pullback Signs
Despite the slowdown in whale activity and exchange outflows, the Relative Strength Index (RSI) is still showing a bullish divergence. The RSI measures the strength of buying versus selling pressure, and in recent weeks, it has formed higher lows.
This indicates that while the price has experienced brief dips, buyers are gradually regaining control. A bullish divergence typically suggests that sellers are losing power, and the overall market sentiment remains positive.
This upward trend in the RSI aligns with Bitcoin’s price movement. The cryptocurrency recently confirmed a breakout from a falling wedge pattern, with prices holding above $111,000 and nearing the $114,900 mark.
This chart pattern suggests that Bitcoin could push higher in the coming days, provided it maintains its current support levels. A key resistance level is set at $117,600. If Bitcoin successfully closes above this mark on the daily chart, it could pave the way for further gains toward $121,400 and beyond, potentially reaching a new all-time high near $134,100.
Support Levels to Watch for Bitcoin’s Next Move
While Bitcoin has shown strength in the RSI and chart patterns, it faces significant resistance levels that could stall its progress. If Bitcoin struggles to maintain support above $112,200, it could experience a deeper pullback. A drop below $108,900 would indicate a shift in momentum, exposing the $103,500 support level. This support zone has previously provided strong price support, but a break below it could signal a more significant correction.
The market’s direction will largely depend on how Bitcoin behaves around these critical levels. If Bitcoin fails to break through the resistance at $117,600, the likelihood of a pullback increases. Conversely, holding above $112,200 could give Bitcoin the momentum needed to push toward its next all-time high.
