Bitcoin (BTC) hit a record high on December 17 but has since fallen below $100,000. Key indicators, such as ADX, along with cautious whale activity, point to a weakening downtrend.
As BTC approaches critical resistance and support levels, its next moves could greatly impact its price direction in the coming days.
BTC ADX indicator shows that the downtrend is weakening
Currently, BTC’s ADX stands at 18.81, down sharply from nearly 50 just seven days ago. This decline highlights a significant weakening in the strength of Bitcoin’s ongoing downtrend.
The rapid decline in ADX indicates that the momentum that has been driving BTC’s recent price movements is fading, leaving the market in a state of reduced directional strength.
The Average Directional Index (ADX) measures the strength of a trend, whether bullish or bearish, on a scale of 0 to 100. Values above 25 typically indicate a strong trend, while readings below 20 indicate a weak or non-existent trend. With BTC’s ADX at 18.81, this low reading suggests that the current downtrend may be losing momentum.
As a result, Bitcoin may enter a short-term consolidation phase characterized by low volatility and sideways price movement.
Whales in the Bitcoin Market Have Started to Accumulate Again
The number of Bitcoin addresses holding at least 1,000 BTC saw a significant drop between December 16 and December 17, falling from 2,108 to 2,061. This drop highlights a significant sell-off or redistribution of holdings among large investors.
The metric then stabilized until December 24, when it dropped further to 2,049. Such changes in whale activity can have a significant impact on Bitcoin, as these addresses typically represent entities with significant influence on price movements due to their ability to make large trades.
Tracking these so-called Bitcoin whales is crucial because their buying and selling behaviors are often leading indicators of broader market trends. When whales accumulate, it signals confidence in Bitcoin’s potential price growth, while widespread selling can indicate caution or profit-taking, which could lead to a market pullback.
After a sharp decline in whale numbers, the indicator has started to rise slightly, with the current count standing at 2,056. This rise, while not happening at a rapid pace, indicates a cautious return of confidence among major holders. This gradual accumulation may indicate a stabilization in the Bitcoin price in the short term.
BTC Price Prediction: Can It Recover to $100,000?
Bitcoin price is currently approaching a critical resistance level at 94,200. If this level is broken, it could open the door for further upward momentum, with potential tests of 98,700 and then 102,500 if the uptrend strengthens.
Despite the potential for an upward move, BTC’s EMA lines are still indicating a bearish setup, as the short-term EMAs are below the long-term ones.
This formation reflects the continuation of the bearish sentiment in the market. If the downtrend regains its strength, BTC could retest the support at 90,700. If this support fails to hold, the next downside target could be 88,089.