Bitcoin prices fell 10.82% last week, breaking the rebound momentum of the previous week, and fell another 2.81% this week, falling below the $58,000 mark, ending the year in a dismal manner.
Crypto markets see $138 million in long position liquidations amid increased sell-off. As supply inflows intensify, will the $57,000 support break under pressure?
Seller introduction
Besides retailers and short-term holders (the weak side), there are strong selling forces in the cryptocurrency market. Among the biggest sellers, the US government and MtGox exchange topped the list.
According to the repayment plan, MtGox repaid 95,958 BTC ($6.07 billion) in July and August. However, the exchange still holds 44,898 BTC ($2.65 billion). This is almost 33% of the initial holdings.
Additionally, the US government seized $203,650 in BTC ($12 billion), which could lead to a massive supply inflow if the situation changes, despite the ongoing presidential campaign.
Bitcoin (BTC) price performance
In the 4-hour chart, Bitcoin price is showing a sharp drop over the weekend. With a 2.81% drop on Sunday, BTC price is now around $58,000.
Currently trading at $58,051.11, BTC price action is showing a falling wedge pattern as the price range narrows. Moreover, the sudden increase in bearish influence has led to a debt crossover of the 50 and 200 EMA on the 4-hour chart.
As BTC price tests the $57,000 support level, the possibility of a consolidation range capped at $61,500 is increasing. This is supported by the bullish divergence of the RSI line, which signals a potential bull cycle with a short-term resistance trendline breakout.
According to the Fibonacci levels, supports below $57,000 are $55,647 and $51,335. On the upside, resistance above the $61,500 ceiling is $65,700 and $69,600.
Whales to the rescue!
Despite the sell-off, the number of Bitcoin whales in the cryptocurrency market continues to increase. The number of wallets holding at least 100 BTC has increased by 283 in just one month, indicating that an underground buying frenzy is taking off. According to data from Santiment, there are currently 16,120 wallets on the network holding at least 100 BTC, a 17-month high.
To support this increase, long-term holders now control 75% of the total supply, having added $262,000 in supply in August. As a result, the total supply now stands at 14.82 million BTC.
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