FX.co ★ Crypto market vulnerable to asset redistribution

Bitcoin experienced a slight uptick following a major sell-off observed at the beginning of the week. Recently, we noted that approximately 400,000 Bitcoins had been sold over the last month, as large holders began to offload this asset. However, new statistics reveal that during the same period, other market participants purchased 350,000 BTC.

This situation can be explained by the selling activity of old long-term holders and the simultaneous increase in purchases by other large players. It represents a redistribution from one group of long-term holders (sellers) to another group of fresh long-term holders (buyers). Thus, it is possible that the current market situation is not as critical as it may seem.

Such a transfer of bitcoins from one set of hands to another is characteristic of consolidation periods in the cryptocurrency market. Old investors, taking profits after a prolonged holding period, are making way for new players who believe in the bullish outlook. This dynamic indicates the maturity of the market and the involvement of a broader audience.

However, the significant volume of sales by long-term holders still warrants attention. It's essential to understand the motivations behind these sales. They may be tied to changing investment strategies, the need to secure profits for other purposes, or concerns regarding macroeconomic instability.

To gain a more complete picture, it's necessary to consider other factors influencing Bitcoin's price. These include the geopolitical situation, cryptocurrency regulation in various countries, the development of the crypto industry infrastructure, and the integration of Bitcoin into different economic sectors.

Despite some uncertainty regarding the behavior of long-term investors, the overall trend in the Bitcoin market remains positive. An increase in trading volume, a rise in new users, and ongoing interest from institutional investors all point to a sustained belief in the future growth of this digital currency.

Trading recommendations

Regarding Bitcoin's technical picture, buyers are currently aiming to reclaim the $105,300 level, which would open a direct path to $108,800, and from there, it's just a short distance to the $111,300 level. The most distant target will be the high around $113,500; surpassing this level would signify attempts to return to a bullish market. In the event of a decline, I expect buyers at the $102,400 level. A return of the trading instrument below this area could swiftly push BTC down to around $99,400, with the further target being the $95,800 region.

For Ethereum's technical outlook, a solid consolidation above the $3,505 level opens a direct route to $3,664. The most distant target will be the high around $3,818; exceeding this level would indicate a strengthening bullish market and increased buyer interest. Should Ethereum decline, I anticipate buyers at the $3,327 level. A return of the trading instrument below this area could quickly drop ETH to around $3,139, with the further target being the $2,950 region.

Chart indicators

• Red indicators represent support and resistance levels, where a slowdown or active price increase is expected.
• Green represents the 50-day moving average.
• Blue indicates the 100-day moving average.
• Light green signifies the 200-day moving average.

Crossovers or tests of the moving averages usually halt or set the market's momentum.