Selling and frantic trading continue while exchanges see more BTC enter than leave.
Bitcoin (BTC) fell towards $30,000 on Jan. 26 after higher levels evaporated and fresh miner outflows appeared to suppress price action.
BTC price rally turns sour
Data from Cointelegraph Markets and Tradingview showed the largest cryptocurrency abruptly U-turn as it neared $35,000 in early week trading.
At the time of writing, BTC/USD was lingering closer to $31,000, marking 24-hour losses in excess of 5%.
A combination of factors, all of which suggest a short-term profit-taking mission among market participants, entered the scene on Monday to keep bulls from taking prices higher.
Miners likely still selling
Data shows that miner outflows — funds leaving mining pools — continued to spike this week. As Cointelegraph reported, last week’s price dive came as largest pool F2Pool saw several days of major outflows. This time, however, smaller miners were taking the lead.
Outflows may not specifically indicate that miners are selling BTC, but show that mined coins are moving, possibly to venues where they will form part of a trade.
According to on-chain analytics resource CryptoQuant, total outflows were down this week versus last, but still heightened compared with recent months.
Exchange flows positive for Bitcoin
Looking at exchanges, traders appeared to be nervous regarding market strength. Unlike behavior during Bitcoin’s vertical price growth at the turn of the year, net flows to exchanges were positive in recent days.
Compiled by on-chain monitoring resource Glassnode, data tracking major exchanges showed that around $108 million more was deposited than withdrawn on Monday.
Conversely, supplies of largest altcoin Ether (ETH) on trading platforms fell by $47 million, while Tether (USDT) increased by $65 million.
Removal of coins from exchanges implies that holders have no intention to trade or sell them, instead placing them back in hot or cold storage wallets.
Coins are highly active
There are more active Bitcoin addresses than ever, while BTC holdings kept moving in recent days.
Bitcoin Days Destroyed, which measures the amount of each transaction on the Bitcoin network versus how long ago the coins involved last moved, hit three-month lows this week.
Glassnode tracked a steep decline in the metric in January, coinciding with a trading frenzy on the back of Bitcoin hitting new all-time highs of $42,000.
At the same time, wallet numbers themselves passed 1.24 million as of Jan. 8, the latest date for which data is available.
Resistance is in…
A glance at the spot market on Tuesday highlighted multiple resistance levels on BTC/USD, with sellers lined up at $1,000 increments beginning at $35,000.
So far, bulls have failed to tackle any of these, with support likewise in place at each $1,000 level until $27,000.
…And greed is out
Finally, after hovering at record levels in Q4 2020, a classic measure of investor sentiment came back down to October levels in recent days only to then rebound to 71.
The Crypto Fear & Greed Index, which uses a basket of factors to determine whether investors themselves will cause Bitcoin to boom or bust, swapped “extreme greed” to comparatively normal “greed.”
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