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Bitcoin has been experiencing a notable increase in market activity, with recent movements indicating that sellers are becoming more active.
A Major Price Drop On The Horizon?
According to a post by XBTManager, a contributor on the CryptoQuant QuickTake platform, Bitcoin’s price rise last week, which saw it temporarily break out of its recent range, was accompanied by a surge in volatility.
This uptick in activity included a significant transfer of Bitcoin by short-term holders, with 33,155 BTC moved, as indicated by the 1-week to 1-month spent output age bands.
Bitcoin spent output age bands. | Source: CryptoQuant
This transfer of assets, particularly by short-term holders, could signal an immediate selling pressure on the market, potentially leading to a short-term price pullback.
Meanwhile, despite the chances of a major drop on the horizon given the gradual increase in sellers, Bitcoin has recently managed to reclaim the $65,000 mark, albeit briefly; it has since retraced and is currently trading below this level.
As of the time of writing, Bitcoin is holding steady at around $63,000, reflecting a 1.2% decline over the past 24 hours.
The report suggests that if the activity within these age bands continues to increase, traders should exercise caution as the selling pressure could intensify, leading to further volatility in the Bitcoin market.
Short Term Price Outlook On Bitcoin
Amid these developments, renowned crypto analyst Ali has shared his short-term outlook for Bitcoin, focusing on its current price action. In a post published today on X, Ali noted that Bitcoin appears to be trading within a parallel channel in the lower time frames.
Parallel channel on Bitcoin chart. | Source: Ali on X
For context, a parallel channel refers to a chart pattern that forms between two parallel lines, where the price of an asset moves back and forth between the upper and lower boundaries of the channel.
The upper boundary typically acts as resistance, while the lower boundary supports. Analysts often look for breakouts above or below these channels to signal potential reversals or continuations of a trend.
Ali pointed out that if Bitcoin’s support at $63,500 holds, the cryptocurrency could rebound to $64,200 or even $64,800. However, if the support level fails, a drop to $62,800 might be on the horizon.
#Bitcoin seems to be trading within a parallel channel on the lower time frames. If the $63,500 support holds, $BTC could bounce back to $64,200 or even $64,800. However, if it breaks, a drop to $62,800 might be on the horizon! pic.twitter.com/4hROkZxQNp
— Ali (@ali_charts) August 26, 2024
Featured image created with DALL-E, Chart from TradingView
