Bitcoin bears hit pause at $41,700, BTC price likely to begin recovery soon

Bitcoin bears hit pause at $41,700, BTC price likely to begin recovery soon

Bitcoin price dropped to $41,707, and BTC price made a comeback above $42,500 on Monday. 

Rising Bitcoin supply on exchanges saw BTC fear and greed index shift to neutral. Bitcoin whales engaged in profit-taking as the BTC price slipped from $46,900 to $41,700, according to Sentiment data. 

Bitcoin (BTC) price slipped to its support zone on Monday as market participants turned their attention to Ethereum and altcoins. BTC Spot ETF approvals by the Securities and Exchange Commission (SEC) turned out to be a “sell the news” event, with Bitcoin suffering a 15% decline in its price. 

At the current price, 79.33% of BTC wallet addresses are profitable, on-chain data shows. Crypto analysts have said that BTC issuers’ accumulation of the asset could catalyze a recovery in the cryptocurrency as it fuels demand. 

Luke Broyles, a crypto expert on X, said that at the current rate, BlackRock could end up owning more Bitcoin than MicroStrategy by February 1. Broyles argued this could change if current rates slow down or Bitcoin price rallies. 

Demand for Bitcoin from ETF issuers could catalyze a recovery in BTC price as the asset’s downtrend seems to have hit support at $41,700. 

BTC is currently in a support zone ($41,417 to $43,345) where 2.93 million addresses acquired 991,100 BTC, according to IntoTheBlock data. The next target to the upside is the $43,345 level.

Factors that likely contributed to Bitcoin’s recent decline include its rising supply on exchanges and whale profit-taking. 

BTC supply on exchanges climbed from a six-month low of 5.30% on January 7 to 5.39% on Monday. Typically, an increase in the asset’s supply on exchanges is considered bearish as it may contribute to a rise in selling pressure. 

Sentiment data shows how the recent spikes in whale transactions valued at $100,000 and higher coincide with similar moves in the Network Realized Profit/Loss metric. This means that large wallet addresses are indeed taking profits, contributing to push BTC price lower.

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