Bitcoin (BTC) Price Analysis: Dying-Minute $50k Breakout or Another Pullback??
Key Insights:
Bitcoin (BTC) price prodded above the $44,000 mark on Thursday morning as the bulls swung back into action. On-chain data trends reveal Bitcoin investors are holding an unusually high amount of BTC in their trading wallets.?
Can BTC price stage a dying-minute rally above $50,000 before the end of 2023?
Bitcoin Holders Have Shifted $200 million BTC into Trading Wallets this Week??
Bitcoin came within $700 of scoring a new 2023 peak on Thursday as BTC prices traded as high as $44,050 on Binance Exchange . But despite Bitcoin trading at a weekly peak, a worrying on-chain metric signals that BTC is likely to face another pullback.?
According to the CryptoQuant chart below, investors held a total of 2,033,186 BTC?in exchange-hosted wallets at the start of the week on Dec 16. But at press time on Thursday, Dec 21, the figure has increased noticeably to hit 2,037,796.?
In essence, BTC Exchange Reserve deposits have now increased by 4,016 BTC this week, raising concerns of an imminent profit-taking session.??
Typically, an increase in Exchange Reserves suggests that many investors are seeking out profit-taking opportunities in the short term.
Unsurprisingly, Bitcoin price has historically trended downward when Exchange reserves rise and vice versa, as observed in the chart above.?
Exchange Reserves is an on-chain metric that tracks real-time changes in the portion of a cryptocurrency's supply that is currently deposited across exchanges and trading platforms.
With Bitcoin price currently trading at $44,000, the 4,610 BTC exchange inflows highlighted above, mean that investors have added $202 million worth of Bitcoin to the spot markets supply this week alone.??
Unless it is matched by a comparable degree of fresh demand, this $202 million dilution of market supply could momentarily slow down the Bitcoin price rally in the short term.?
BTC Price Forecast: Can it Reach $50,000 in 2023?
The general social sentiment surrounding BTC remains firmly bullish. However, drawing historical and intuitive inferences from the current on-chain data trends, Bitcoin is more likely to consolidate below $45,000 than reclaim $50,000 in the days ahead.
The Relative Strength Index (RSI 14) trending at 62.83 also confirms that BTC market is now entering overbought territory. Hence. strategic new entrants could wait for a less overheated entry point.
The RSI is a technical indicator that gauges the momentum of the current price trend of an asset. Values near or above 70 suggest an overbought market, possibly indicating an upcoming retracement. Conversely, values below 30 suggest that the asset might be oversold and undervalued.
The Bitcoin bulls could regroup at the 7-day SMA price of $42,572 for consolidation. But failure to hold that support level could open the doors to a possible pullback below $41,000.
On the upside, the bulls could take charge of the Bitcoin markets again if BTC price flips $45,000. But as observed in the chart above, the bears could mount a significant resistance at the current 2023 peak price of $44,700.
Overall, (certainly not ChatGPT ??), considering the rising Bitcoin exchange supply, this bullish scenario looks unlikely in the short term.