The Bitcoin market has faced a tumultuous race, with the digital currency struggling to find stable ground amid swirling financial currents. Recent news of potential interest rate hikes prompted a strong selloff that sent Bitcoin crashing below $30,000, erasing its monthly gains. With the price of BTC dropping more than 8% in just a few days, sellers have been flexible. Despite these challenges, Bitcoin appears to have stabilized at its monthly support level, offering investors a glimmer of hope for a possible bullish reversal in the coming week.
Bitcoin shows a bullish sign amid the turmoil
A recent on-chain data analysis revealed a noticeable spike in Bitcoin exchange outflows, potentially signaling a bullish trend for the cryptocurrency’s price. A CryptoQuant analyst pointed out that a significant 2,138 BTC were withdrawn from centralized exchanges in the past day, sparking renewed interest among market watchers.
The “exchange outflow” metric tracks the total volume of Bitcoin withdrawn from wallets associated with centralized exchanges. A sharp increase in this indicator can be interpreted as a sign of bullish sentiment, as it suggests that investors are choosing to hold their assets in anticipation of higher prices rather than trade them on the exchange.
The recent surge in large drawdowns from cryptocurrency exchanges has occurred as the price of Bitcoin hovers around the lower $28,000 range, a relatively low level from its position above $30,000 a few days before. This phenomenon suggests that these off-exchange transfers could indicate new buying activity in the market.
A closer look at the chart also reveals that currency inflows remain weak over the same period, signifying a lack of deposits to offset withdrawals. This trend implies that, at the moment, there may be no additional interest in selling at current price levels.
Is the BTC price rebound on the horizon?
Bitcoin price stopped falling further as it found a steady support level at $27.5,000. After hitting a low near $27,140, Bitcoin broke above the 23.6% Fib level, hinting that investors are hoarding BTC on the downside.
At the time of writing, the price of BTC is trading at $27.6,000, down more than 1.47% in the last 24 hours. If the price of BTC falls below $27,000, it may experience a decline, first to $26,400 and then potentially to the neckline of the head-and-shoulders (H&S) inverted pattern at $25,500.
However, a bounce is likely expected from $27,000, and the bulls could send BTC price above the EMA-20 trendline. If Bitcoin rises above $27.8,000, a bullish rally could continue towards $28.5,000. A successful break above the EMA-20 will push BTC price back towards its previous bullish range of $30,000.