Can easing sell pressure ignite a Rally?

Bitcoin (BTC) has been on a downtrend. Many experts and crypto enthusiasts are talking about trend reversal, but we have not seen any spike in trading volume. Could the recent decrease in selling pressure in BTC lead to its value going up again? Let’s take a closer look at how BTC is doing right now and try to figure out what might happen next.

BTC Price Action: Still Quiet and Unpredictable

Time to get technical! Looking at the BTC/USD price action, we can find around $26K support after a sudden fall in the last week. In the last few days, BTC has shown little positive, looking to bounce back to the previous level of $29K. However, most technicals are bearish; RSI is trading in the oversold area. 

Indeed, we can expect a bounce back, but it could be a bear trap until it stays around $29K on a weekly basis. Based on our algorithmic predictions for Bitcoin, the price will continue to trade between $26K and $64K. 

Understanding the Metrics: BTC Flow and Whale Ratio

The BTC Flow metric presents the total Bitcoins moving in and out of exchanges in relation to the BTC transferred on the Bitcoin network. On the flip side, there’s the Whale Ratio (WR), which is the ratio of the top 10 inflows to the total inflows on exchanges.

When the WR is riding high, it is a signal that whales are making moves on exchanges. On the other hand, a low WR suggests less trading activity on exchanges. 

Now, the selling pressure is low, but this metric is really worth watching because it gives us a hint about the current trend. Whenever the FFR (Funding Flow Ratio) goes up this year, it works as a green light for a price increase.

The Bitcoin Realized Cap and Its Say

All right, we have some hints about selling pressure, but can that trigger a Bitcoin rally right away? Let’s look at another metric – the Bitcoin realized cap. This cap is a way to measure a coin’s value based on the stored value on the Bitcoin network. It also takes into account the Volume-Weighted Average Price (VWAP).

As things stand, the realized cap sits at around $395.81 billion. It suggests BTC is not undervalued in the current market conditions. So, the chance of a significant price surge in the short term might be less. 

Wait and Watch Time for Bitcoin Enthusiasts

The drop in selling pressure has definitely caught our attention, but whether it leads to a BTC rally is still unsure. Bitcoin might start a rally in the long term, but will it start in the next two months? It is difficult to answer. Keep an eye on Bitcoin; the surge in trading volume will be the primary indication of a rally.