$20,000 Seems to Be Short-Term Resistance for Bitcoin; Here’s What

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Bitcoin is experiencing a significant correction following a few successive days of persistent upsurge. The market rally appears to have hit a roadblock, and the bears are kicking in. As BTC approached the $20k zone, recent charts signalled a surge of onchain whale activity. This is an essential indication of a psychological resistance level.

BTC stayed above $23.5k for a week for the first time since June

A recent analysis of current trends on several CryptoQuant charts indicated a likely short-term BTC resistance at $25k. Amidst the recent relief rally, the asset traded above $23.5k for seven consecutive days—from August 10 to 17. This made it the first time BTC stayed above the level for so long since its drop from $30k on June 10.

Nevertheless, the asset attained an overvalued status following this milestone, and rejections poured in as it attempted to take $25k. In the midst of all this, on-chain whale transactions saw an awakening. In its attempt to retake $25k, BTC disturbed the slumber of whale wallets and long-term holders.

There was a massive increase in whale activity (1k – 10k BTC), as indicated by the Bitcoin Spent Output Value Bands. Additionally, as signalled by the BTC Exchange Inflow chart, a spike in BTC whale inflow appeared recently. This suggests that most of these BTCs were taken to exchanges.

BTC Exchange Netflow shows an increasing inflow of coins into exchanges

A large number of the whale tokens represent assets that were just a day old. Notwithstanding, whales moved about 8k BTCs that had been hibernating for 3 to 5 years, as the charts reveal. The mass movement of tokens to exchanges, especially in rallies, could indicate an intention to sell.

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Additionally, the BTC Exchange Netflow shows an increasing value, suggesting that inflows are more significant than outflows. This is primarily a bearish pointer. On the other hand, with a value of 0, the Binary CDD metric shows a low long-term holders’ movement.

At the time of writing, BTC has shed 6% of its value in the past 48 hours. The asset is currently trading at $19,262. The recent rally appears to have encountered strong opposition. Despite all this, some proponents are convinced the worst of the markets have already been priced in.

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