Bitcoin is in jeopardy as traders continue to pile up long positions, although a few whales have left the network. Nonetheless, the future price action of BTC is determined by its ability to maintain a position above crucial support.
Bitcoin may be doomed to further decline after a pivotal threshold.
Last week, the pioneer cryptocurrency’s price fell over 11%, shedding over 4,000 points. BTC has been driven to a vital area of support, which looks to be diminishing over time due to the downswing. Traders, though, remain optimistic about Bitcoin’s potential price action.
The BTC-USDT Long/Short Ratio on Binance Futures keeps rising, reaching a 3.03 ratio on Apr. 13. Approximately 75.2% of all accounts on the world’s biggest crypto derivatives exchange in terms of trading volume are net-long Bitcoin.
Source: Binance
Traders are optimistic since BTC looks to be staying at the lower boundary of a parallel channel in the daily chart in mid-January. Price history indicates that each time Bitcoin reaches this support level, it often bounces back to the channel’s middle or possibly the upper trendline.
Similarly, the flagship cryptocurrency’s price might jump to $45,000 or even $50,000.
Source: TradingView
However, increased confidence among traders might be interpreted as a negative sign. More crucially, as long positions keep piling up, it gives rise to a prolonged squeeze.
This negative prospect is reinforced when we examine whale behaviour. According to on-chain statistics, the number of addresses holding more than 10,000 BTC on the network has decreased by more than 4.60% over the last four days. At least four major whales have sold or redistributed their tokens within this short period.
While the spike in downward pressure tends to be minor at first glance, each of these addresses has liquidated more than $400 million in Bitcoin.
Source: Glassnode
As a result, it is critical to pay special attention to the channel’s lower boundary, at around $39,400. A decisive daily candlestick close below this critical demand level might trigger a cascade of liquidations, sending Bitcoin further down. BTC would next witness the support at roughly $35,000 or even $30,000.