Bitcoin
rose aggressively with other risky instruments after a market correction in
March 2020. Bitcoin prices reached all-time highs by April 2021, or more than
by 1000%, which is more than impressive for such an expensive asset.
It went
into correction after this and it should have ended far below peak prices if
compared to previous corrections of the Bitcoin when it lost around 85% of its
highs. However, this time not everything went according to this plan. A new
high emerged during late autumn 2021 that made the technical picture of Bitcoin
more complicated. The rise of Bitcoin prices in July was rather artificial even
for the crypto market with extra high volatility. This rise stopped in
November, and now the “double top” pattern was formed. It is a very strong
pattern that may send Bitcoin prices deep down if the price crosses down the
bottom between two tops. If so, Bitcoin may plunge to $10,000.
The
consolidation of Bitcoin prices was formed in the second half of May, and
bottom level between two tops was broken through on May 30. Now, according to
classics, it is better to wait for a retest of the $31,000 level, where a bearish
attack may be launched again. The upside potential of the Bitcoin is limited by
the $33,000-34,000 resistance zone. And there are no strong reasons for the market
to reverse. It may be worth noting that the number of active crypto wallets has
not recovered since prices dropped in the middle of 2021. The number of active
wallets was 1.2 million in April 2021 and dropped to 700,000 in July 2021. This
number is still below 1 million in the first half of 2022. This may indicate
that a recent rise of Bitcoin prices has not attracted investors that may store
their crypto savings in cold wallets.
Interesting
note – the number of coins stored in the wallets with coins from 10 to 100 BTC
and above 10,000 BTC grew by 80,724 BTC over recent weeks. This number is very
close to 80,081 Bitcoins sold by LUNA Foundation Guard to support UST
stablecoin that is strictly linked to the U.S. Dollar. This may explain a
recent consolidation as large Bitcoin holders were accumulating Bitcoins in
order to support UST and LUNA.