Bitcoin (BTC) price fell to $16.8k amid a massive selloff across the crypto market in the last 24 hours. Traders await a further fall in the BTC price below $13k to start buying Bitcoin from lower levels. However, on-chain data indicates the bear market will soon reach a bottom.
On-Chain Data Reveals Bitcoin Bottom
Long-term holders are selling their Bitcoin (BTC) holdings more frequently in the last few weeks. The last time such frequent selling of Bitcoins by long-term holders was recorded in 2021.
As reported previously, whales are still selling their BTC holdings. Whales continued to reduce their Bitcoin holdings since June 2022 and sold nearly 400k BTCs. On December 10, a whale transferred 9,901 BTC worth $170 million to crypto exchange Kraken after 1.5 years.
The Average Dormancy indicator measures the average number of destroyed days the coins have moved since their entry into the portfolio. An increase in value shows long-term Bitcoin holders moving or selling their BTC holdings. This indicates an upcoming fall in the BTC price.
Moreover, the indicator directly influences the NVT Golden Cross, which is a signal indicator similar to the Bollinger Bands. Traders use the indicator to make their short or long positions as it predicts local tops and bottoms.
Historically, the movement of dormant or old bitcoins suggests an end of a bear market and the return of the accumulation stage. However, considering the miner capitulation and whale still selling Bitcoin holdings, an increase in volatility is expected in the coming weeks. It will form a new bottom.
Could BTC Price See More Downside?
Bitcoin again breaks below $17K and fell to a low of $16.8k in the last 24 hours. With $18k as a strong resistance level, crypto analysts Michael van de Poppe and “Wolf of the Wall Street” Jordan Belfort shared $16.5k as the support level.
BTC price can fall to its delta price of $12.8k to form a bottom. However, whales and investors who sold their long-term BTC holdings may re-enter near $15k. The US Fed’s rate hike decision this week will drive the price action until Christmas.
Also Read: Will Bitcoin (BTC) Price Struggling To Surpass $17.3K Leads To Deeper Correction?
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