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.