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The largest cryptocurrency Bitcoin (BTC) quickly recovered after coming under strong selling pressure on January 19th, rising from a drop to $40,200 to $42,240 within minutes. Following this volatility, some key metrics were identified to be giving significant bullish signals.
Bitcoin’s RSI Shows Bullish Divergence
On-chain data provider Santiment recently provided encouraging news to investors amid challenging market conditions. Despite facing the risk of falling below the $40,000 level, Bitcoin quickly rebounded and achieved an impressive 3.2% rise within just three hours, surpassing the $42,000 threshold. However, BTC could not maintain its position above $42,000 after profit-taking and is currently trading around $41,500.
Santiment reported that fundamental metrics such as the Relative Strength Index (RSI) and the 30-day Market Value to Realized Value (MVRV) are showing bullish signals. While concerns among investors are growing, these positive indicators suggest a potential shift in market sentiment and a renewed increase in optimism for Bitcoin.
According to data from leading blockchain analytics firm Glassnode, there is a significant influx of liquid, old BTC re-entering circulation, triggering the most substantial profit-taking event since the all-time high (ATH) in November 2021.
For the current cycle, Realized Profit peaked on January 4th, reaching a significant milestone. On that day, there was an astonishing amount of profit-taking, with over $1.3 billion as BTC changed hands at high cost bases. This observation indicates significant movement in long-held BTC and a notable shift in profit-taking within the cryptocurrency market.
Whale Activity Increasing Rapidly
Experienced cryptocurrency analyst Ali Martinez reported today a significant increase in Bitcoin whale activity. According to his findings, the number of wallet addresses holding more than a thousand BTC has reached its highest level since August 2022, totaling 1,510.
This increase in the number of large Bitcoin investors suggests strong market confidence or potential indicators of strategic purchases among major players in the crypto world. However, Martinez expects Bitcoin’s price to potentially drop to $34,000 before the next bull run.
