- Bitcoin whales have sold about 50k BTC worth around $2.2 billion in the past week as the mother coin struggles to rally beyond the resistance level of around $44.5k.
- The total altcoin market cap has successfully retested a macro breakout of around $700 billion, signaling the onset of the long-awaited altseason.
After an impressive performance, YTD, Bitcoin (BTC) has experienced diminishing returns as altcoins prepare to take charge. Already, Ethereum (ETH) price has successfully retested the breakout of an ascending triangle, thus convincing veteran trader Peter Brandt who was previously bearish that the altcoin bulls are in control.
Crypto cash flow has continued to move from the flagship coin to the altcoin industry, thus signaling more gains in the alternative coins.
Bitcoin Price Action and Analysis
With only a few days left to the end of 2023, Bitcoin price action in the coming days will play a crucial role in the first quarter’s performance. However, the approval of the dozen spot Bitcoin ETFs in early January 2024 could significantly improve the short-term bullish outlook.
Moreover, the approval of spot Bitcoin ETFs in the United States will mean more institutional investors holding Bitcoin on their balance sheet, thus reducing the overall circulating supply that currently stands at around 2 million coins.
Additionally, the fourth Bitcoin halving is less than four months from happening, which will help reduce the miner’s selling pressure drastically.
From a technical standpoint, Bitcoin price is likely to retrace from the current levels in the coming days. Moreover, the daily time chart has been forming a triple top in addition to a bearish divergence on the Relative Strength Index (RSI). However, Bitcoin price could rally 8-10 percent before retracing towards the support level of around $35k.
BTC Paves the Way for Altseason
As Bitcoin price has struggled to maintain the bullish momentum in the past few weeks, investors have been diversifying their portfolios in the altcoin market. In the past week, Bitcoin whales led by miners have sold around 50,000 BTC worth about $2.2 billion, indicating bearish sentiment.
According to a weekly report provided by CoinShares, Bitcoin’s investment products recorded an outflow of about $33 million for the first time in a couple of months. Interestingly, the report indicated that altcoins investment products led by Solana (SOL) recorded a cash inflow of more than $10 million in the past week.
Meanwhile, on-chain data analysis provided by Santiment shows 89 percent of Bitcoin supply is in profit, which is the highest since the calendar flipped in January. On the other hand, the altcoin market led by Polygon (MATIC), and Litecoin (LTC) have a lower percentage, amounting to about 42 percent of their supply in profit. Ideally, crypto investors tend to hold on to their portfolio if it is still underwater and profit-taking begins after hitting profits.
Bitcoin price has continued to enjoy clearer crypto regulatory scope around the world, thus significantly improving its overall liquidity. With the altcoin industry already known for its high volatility due to its low trading volume and market cap, more investors have been diversifying their portfolio to small-cap altcoins with medium risk to increase their profit ratio.
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