Bitcoin (BTC) has consolidated between $ 55,000 and $ 56,000 after drifting to $ 61,000. Whale groups indicate that one main layer needs protection to prevent falls in the region of between $ 40,000.
According to Whalemap, which tracks bitcoin whale activity, $ 55,406 is an important support area for whale groups.
If the bitcoin price drops below $ 55,406, Whalemap analysts confirm that the possible next step would be a drop to $ 47,438.
What are the whale populations and why is Bitcoin undergoing a deeper correction
Whale groups form when large investors buy or sell bitcoins and do not move these coins accordingly.
Since whales tend to buy more at the entry threshold or sell at break-even after a correction, flocks of whales usually act as support and resistance levels.
With Bitcoin currently hovering around $ 55,406, this level is an important support area for whale populations. Thus, Bitcoin needs to stay above this level in the short term to avoid a dangerous downturn that could lead to cascading liquidations.
Between March 15 and 16, Bybt.com data showed that more than $ 2 billion in futures contracts were terminated, bringing the funding rate down to normal levels.
With the futures market recovering as long as Bitcoin comfortably remains above $ 55,406, the likelihood of a major correction is greatly reduced.
Whalemap researchers said:
“55406 is a big level that we have to maintain. Other than that, it will likely go down to 47438. 47438 is a very strong number … Several whale wallets have bought #Bitcoin at this level and it’s still holding.”
However, if the Bitcoin price falls below $ 50,000 again, it will be in the danger zone. The $ 45,000 to $ 47,000 range is a large area of overall support.
With the risk of a 10-year US Treasury rally, a potential drop below $ 50,000 could significantly weaken the short-term dynamics of BTC.
Based on these scenarios, there are expectations that Bitcoins valued at over $ 55,000 will continue to accumulate.
Don’t worry, stock-to-flow (S2F) work in progress.
As Bitcoin struggles for a significant support area, BTC / USD is quite in line with its popular stock-to-flow (S2F) pricing model, which sets a year-end target of $ 100,000.
A trader under a pseudonym known as “Rekt Capital” noticed that S2F is not only heading towards its next target, but may see an upward bias.
Upward slope means that the asset is higher than the price of the model. The therapist said:
“The upward divergence of the # BTC price in excess of the fluctuation share tends to exceed the tops of the bull market. BTC has experienced 5 major upward divergences in its history. In the current bull market, #Bitcoin will face a sixth upward rejection.”
Short-range whale populations might have some effect on where the BTC price might go in the near future, usually within a week or two.
But long-term models like S2F can be used to test whether the broader upward and downward momentum of Bitcoin will continue over the coming months and years.