- Bitcoin price sustained above the key psychological level of $19,000 and broke past $20,100 as the UN warned of a recession.
- A Bitcoin whale sold 71,380 Bitcoin during BTC’s downtrend in the current cycle.
- While Bitcoin price tests the $20,000 and buyers attempt to build momentum, there is a possibility that this is another bull trap.
Bitcoin price climbed above the $20,100 level in the trading session on October 4. The largest asset by market capitalization broke out of the sideways range and started its climb to the $25,000 target. While demand for Bitcoin has increased and there is a bullish momentum built by BTC buyers, there is a likelihood that the recent spike in price is a bull trap.
The US Institute of Supply Management (ISM) announced a steep decline in the manufacturing purchasing managers’ index (PMI). PMI hit 50.9 in September 2022, the lowest level since May 2020. This acted as a case of “bad news is good news” for equities and the traditional market. As Bitcoin’s correlation with equities remains high, the asset recovered, crossing the $20,100 level.
Traders believe the index’s new orders have strengthened the case for the US Federal Reserve to move away from aggressive liquidity withdrawal measures. An earlier than expected pause in the Federal Reserve’s monetary policy tightening is a relief for traders and holders of risk assets like Bitcoin.
Bitcoin buyers stepped in and pushed the asset higher. The United Nation’s published a report on October 3, warning traders of a recession. This has further fueled a bullish outlook among Bitcoin holders.
Amidst the bear market, while holders and new entrants in crypto are awaiting a rally in Bitcoin price, a large wallet investor shed his BTC holdings. Based on data from Bitinfocharts.com, a scalping whale who traded upto 1,000 Bitcoin daily, recently shed all BTC holdings. The whale liquidated a total of 71,380 BTC in four transactions. The whale’s wallet balance is $1.5 billion and the investor has refrained from reaccumulating. While this can be considered indicative of an upcoming bearish development in Bitcoin price, BTC is being pulled out of exchanges at a rapid pace.
Based on data from Santiment, less than 9% of Bitcoin’s supply is on exchanges for the first time since 2018. The current supply of Bitcoin to exchanges is therefore a bullish indicator for BTC.
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