Assessing prospects of a Bitcoin price rally amid institutional investors’ comeback

  • Bitcoin price navigates its way through a choppy market.
  • Institutional investors return to the crypto market as retail traders step back.
  • Whales erect walls preventing Bitcoin price from sustaining an uptrend.

Bitcoin price is back below $20,000 after tagging a weekly high at $20,400. The flagship cryptocurrency could have hit bottom, but internal and external forces prevent a bullish trend reversal. Bitcoin price is expected to keep moving between $18,500 and $20,400 in the short term.

Bitcoin price comes under the immense institutional influence

Michael Safai of Dexterity Capital believes that institutional investors return to the crypto market while retail traders step back. His observation comes amid an ongoing Bitcoin price range-bound movement. Safai reckons that the game has effectively changed from checkers to chess.

We might have been playing checkers two years ago – we're playing chess now.

Bitcoin price is range-bound, but for how long?

Bitcoin is trading between $18,500 (lower range limit) and $20,400 (upper range limit). Its sideways price action has formed a rectangle pattern, implying general market indecision.

The 50-day SMA (Simple Moving Average), red, provides BTC with immediate support, while the 100-day SMA, blue, limit price movement to the upside. The bellwether cryptocurrency must hold above the 50 SMA to avoid testing the rectangle support, which could heighten the risk of a southbound breakout.

BTC/USD eight-hour chart

BTC/USD eight-hour chart

The DMI (Directional Movement Index) negative divergence from the price is raising the probability of further losses ahead of the new week. Similarly, the OBV (On Balance Volume) indicator validates the pessimistic forecast as it slopes further below the one million mark.

In other words, Bitcoin price is at a greater risk of exploring downhill levels. Furthermore, investors holding 1,000 and more BTC are yet to stop their selling activities. The chart below from Glassnode reveals a 7.64% decline from 2,292 to 2,117 addresses – between March 21 and October 8, 2022.

Bitcoin Number of Addresses with Balance ≥ 1k

Bitcoin Number of Addresses with Balance ≥ 1k

Overhead pressure tends to intensify as whales offload their bags. Unless this selling spree dies, it would be imperative to say that the journey downstream is far from over.

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