Bitcoin’s price has declined by over 25% since reaching nearly $110,000, coinciding with a drop in apparent demand to its lowest level since December 2023. Despite this, whale holdings have surged, suggesting potential for future price increases. Bitcoin remains in a parabolic uptrend, with critical support levels indicating an active bull cycle and upcoming price challenges.

Bitcoin’s price has experienced a significant drop of over 25% since reaching its peak of nearly $110,000 almost two months ago. This price correction coincides with a downturn in Bitcoin’s “apparent demand,” raising questions about its future price trajectory.

As of March 17, Bitcoin’s 30-day average Apparent Demand has plummeted to over -152,000 BTC, marking the lowest level since December 2023. The “apparent demand” is an important on-chain metric that analyzes the relationship between new Bitcoin mining and changes in long-term coin holdings, specifically those not active for more than a year.

A positive apparent demand suggests increased market interest, wherein a greater reduction of long-term holdings compared to new production indicates rising demand. Conversely, a negative balance signals weakened demand as new coins produced exceed reductions in long-term holdings.

Despite the apparent demand metrics lagging, there is a silver lining; Bitcoin whale holdings have reached their highest level since March 2021. This accumulating trend among large investors has historically indicated potential price recoveries. For instance, in early 2019, whale accumulation preceded Bitcoin’s significant rally from a low of $3,200.

Similarly, prior to Bitcoin breaking the $20,000 mark in mid-2020, a surge in whale holdings was observed. The current increase in whale positions may reflect a growing belief in Bitcoin’s long-term viability, despite the current weak demand indicators.

The interplay between rising whale holdings and low apparent demand suggests Bitcoin could be undergoing a mid-cycle accumulation phase. Large investors appear to be positioning themselves for the next price ascent. The weekly chart indicates that Bitcoin remains in a parabolic uptrend, supported by a critical green line that may signal sustained upward momentum.

The price has retested this trendline, endorsing it as new support, which previously acted as resistance. Maintaining above this breakout level often leads to continuation rallies, strengthening the case for bullish movement. Bitcoin is currently facing resistance levels between $90,000 and $100,000, requiring a revival above $90,000 to affirm the next bullish phase. Conversely, falling below $80,000 could result in more robust consolidation.

Overall, the structure indicates that the bullish cycle remains intact, as Bitcoin maintains its parabolic formation and market movements suggest potential for further price appreciation.

In summary, Bitcoin has seen a significant price drop and a decrease in apparent demand. However, the notable accumulation of whale holdings suggests that large investors are preparing for potential price recovery. While the short-term demand remains weak, favorable market structures indicate that Bitcoin could be entering an accumulation phase conducive to future price increases. Overall, the current dynamics reflect both challenges and opportunities in the Bitcoin market.

Original Source: www.fxempire.com

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