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Bitcoin Current Price Correction May Cause a Drop to Mid-$40,000

Bitcoin is currently consolidating between $55,000 and $56,000, a price correction after rejecting $61,000. At 18:15 GMT on Tuesday, the coin was exchanging at $55,265, a loss of 1.4% in the last 24 hours.

The pioneer cryptocurrency earlier hit a new all-time high during the past weekend. However, whale clusters suggest that one key level has to be defended to prevent a major drop from the current price to the mid-$40,000 region.

whale map data on whales

According to analysts at Whalemap, a platform which tracks Bitcoin whale activity, $55,406 is the critical whale cluster support area. If Bitcoin falls below $55,406, a further drop to $47,438 should be expected.

Whale clusters occur when whales or high-net-worth individuals buy or sell Bitcoin and do not move these coins after. Typically, whale clusters serve as support and resistance levels. For example, as Bitcoin is hovering around $55,406 price level, it is an important whale cluster area. If Bitcoin price drops below, it will lead to massive liquidations in the market causing the price to fall further.

bybt.com data

From March 15 to 16, the data from Bybt.com showed that more than $2 billion worth of futures contracts were liquidated, resulting in the funding rate dropping back to normal levels.

As long as Bitcoin remains above $55,406, a massive price correction is not a threat to the current price. The analysts at Whalemap explained:

($)55406 big level we need to hold. Otherwise, falling back to 47438 is likely. 47438 is pretty strong though.. A lot of whale wallets have acquired Bitcoin at that level and are still holding.

Analysts still see the price rising

Bitcoin evangelist and analyst, Max Keiser, have said that he thinks that the price of the coin and inflation are related. If the greenback loses value, Bitcoin will gain.

In a tweet, Keiser said that Bitcoin will surge in price, possibly to the $222,000 mark, within this year itself due to inflation. Addressing his followers, Keiser tweeted:

Bitcoin price is signaling fiat money around the world is in a hyperinflationary collapse against Bitcoin. Please keep boosting inflation so my 2021 target of $220,000 comes sooner!

It is clear that his opinion stems from the widely known fact that companies and retailers are looking to crypto as a store of value. Making Bitcoin an hedge against inflation. Experts have also recently argued that since Bitcoin is immune to political shocks, more people will prefer the asset.

In addition,  Stock-to-Flow (S2F) price model, which puts the year-end target at $100,000, has been corroborated by Bitcoin trader Rekt Capital who noted that the S2F model is on its way to its next target. He believes it could potentially see upside deviations.

The trader said:

Upside deviations in BTC’s price beyond the Stock to Flow line tend to precede Bull Market Tops $BTC has experienced 5 major upside deviations in its history In this current Bull Market, #Bitcoin will experience its 6th upside deviation.

If you have any questions and comments on Bitcoin today, use the form below to reply.


© IbrahimAnifowoshe for Commodity News, 2021. | Permalink | No comment |
Published under: Technical Analysis

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