BTC Resistance Persists as US Wallet Activity Raises Questions

Cryptocurrency

Summary:

The recent price action suggests that Bitcoin may face further downside if it closes below the 100-period moving average, where it is currently finding support.

SELL BTC-USDT

Close Time

CLOSED

96650.0

Entry Price

89600.0

99400.0

92766.0 +1433.1 +1.57%

2750.0

Pips

Loss

89600.0

99400.0

Exit Price

96650.0

Entry Price

99400.0

The U.S. government may be preparing to sell its Bitcoin holdings as prices continue to rally. On Monday, a wallet associated with U.S. authorities initiated its first transaction in over a month, transferring nearly 2,000 BTC.

Data from Arkham Intelligence reveals that a government-controlled wallet sent 19,799.99 BTC, worth approximately $1.9 billion, to an unidentified address. Shortly after, these funds were forwarded to a second wallet linked to Coinbase Prime, the institutional trading arm of Coinbase.

This marks the first movement since October, when U.S. authorities transferred around $20 million in cryptocurrencies following a reported wallet compromise. Those assets were returned by hackers and subsequently reorganized into new federal wallet addresses.

Monday’s transaction occurred in two steps: an initial test transfer of 0.001 BTC (valued at $97) to Coinbase was followed by the larger transfer. While the government has not issued an official statement regarding the purpose of this activity, such movements to exchanges are often interpreted as a precursor to selling. Historically, U.S. authorities have utilized Coinbase for liquidating crypto holdings.

Speculation continues to grow about the U.S. strategy for managing its Bitcoin reserves. The timing of the transfer suggests an intent to capitalize on Bitcoin's recent rally or to prepare for future sales. Either scenario could significantly impact the global cryptocurrency market.

Despite these developments, derivative markets indicate resilience. Traders are currently paying an annualized premium of 17% for leveraged positions relative to BTC’s spot price. While this is lower than the 40% premiums seen during stronger bull markets, it demonstrates healthy bullish demand without overextended optimism.

Although Bitcoin remains below its all-time high of $99,609 reached on November 22, derivatives data highlights sustained confidence among traders. However, concerns persist about the durability of recent aggressive buying, particularly by entities such as spot Bitcoin ETFs, MicroStrategy, and Marathon Digital.

Options markets reflect optimism, with whales and arbitrage desks favoring bullish bets. Notably, Bitcoin put options are trading at an 8% discount compared to call options, signaling reduced demand for hedging against price declines. Typically, increased hedging concerns push this metric above 6%, but the current levels indicate steady market confidence. BTC Resistance Persists as US Wallet Activity Raises Questions_1

BTC Resistance Persists as US Wallet Activity Raises Questions_1

Technical Analysis

BTCUSD has struggled to breach its all-time high of $99,677, forming a descending trendline characterized by lower highs. The recent price action suggests that Bitcoin may face further downside if it closes below the 100-period moving average, where it is currently finding support.

The next major support lies near $89,500, a level that previously saw significant accumulation and aligns with the potential trajectory of the 200-period moving average. Should Bitcoin reach this zone, accumulation could occur, potentially setting the stage for a renewed upward trend.

Trading Recommendations

Trading direction: Sell

Entry price: 96650

Target price: 89600

Stop loss: 99400

Validity: Dec 13, 2024 15:00:00

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BTC Resistance Persists as US Wallet Activity Raises Questions

Technical Analysis

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