- Less active Bitcoin addresses are selling their holdings, according to on-chain data
- Some analysts believe this is a sign of bearishness, while other note this may be the beginning of a new cycle
- BTC price has broken out of the consolidation phase to approach $12,400, which would complete the bull pennant
Bitcoin (BTC) price has continued its impressive bull run to trade above the $12k handle again. As predicted by Invezz a few days ago, the BTC/USD price activated the bull pennant chart pattern that is facilitating a move to $12,400.
Fundamental analysis: Inactive Bitcoin addresses are selling BTC
It seems that inactive Bitcoin addresses are selling their holdings, according to on-chain data, resulting in bearish claims among crypto analysts.
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Willy Woo, an on-chain analyst, stated that old hands certainly sold the top until the latest price cycle.
“Dormancy is a measure of ‘old hands selling out.’ It’s interesting to see old hands reliably sold tops until this present cycle. They sold the #bitcoin bottom at $3–$4k, they are selling right now,” Woo said.
A number of factors have prompted the older owners of BItcoin to sell it at the current price. The price of the leading cryptocurrency has tripled since the market crash in March, providing sellers with a solid take-profit area, while the $12,000 mark has acted as a robust resistance over the last two months.
Apart from several technical reasons, there are also cyclical factors that may have prompted old hands to sell BTC. Bitcoin tends to perform negatively during the last quarter of the year, something that might motivate its owners to take profit.
On the other hand, other analysts expect Bitcoin to start a new cycle soon. They believe that Bitcoin has a chance of maintaining its upward trend to test higher resistance areas without experiencing a big drawdown.
A famous crypto analyst Filbfilb brought up the post-halving cycle that occurred in 2017. Filbfilb emphasized that Bitcoin hit a historical peak following its breakout in the same week four years ago.
“Bitcoin’s cyclical behaviour is difficult to escape from. Same week 4 years ago, Bitcoin was trying to finally break the 50% bear market fib retracement. It never looked back after that & tested ATH by January. This time it’s different?” he said.
Technical analysis: Profit-taking zone nearby
As noted in our analysis last week, Bitcoin price has broken out of the consolidation phase to approach $12,400, which would mark the completion of the bull pennant. Today’s gains of about 2.5% are set to help Bitcoin close in the green for the fifth consecutive day.
Bitcoin (BTC) price daily chart (TradingView)
If the price action touches $12,400, or comes very close to it, we may see a reversal on the profit-taking activity. On the other hand, the break of this area would invite new Bitcoin buyers to join the party and potentially push the price action towards $13,800.
On-chain data found that older owners of Bitcoin are selling it, prompting bearish claims among crypto analysts. However, other experts believe that this might be the beginning of a new cycle. In the meantime, Bitcoin price is nearing the first profit-taking zone.