- Bitcoin price managed to hold above $46,000, supported by the 200-day SMA.
- The bellwether cryptocurrency is headed for high volatility following 1.68 million BTC exchange inflow, the largest since June 19, 2019.
Bitcoin is about to step above $47,000 after the declines that dominated this week’s trading embraced crucial support. The flagship cryptocurrency had pulled the entire market down with it due to the rejection suffered above $50,000.
Although several tentative support areas failed to keep BTC afloat, the 200-day Simple Moving Average (SMA), highlighted at $46,000, halted the correction. Recoil from this level currently sees Bitcoin put up a fight to crack the resistance at $47,000 to regain the lost ground back to $50,000.
Bitcoin Price Holds Key Support But Is It Sufficient
According to the latest on-chain data from Santiment, a global behavioral and analytics platform, “Bitcoin just made history with its largest day of exchange inflow since June 19, 2019. These days are now tied for the largest inflow day of all-time both with 1.68M $BTC flowing to exchanges on these respective days. Expect increased volatility.”
Bitcoin Exchange Inflows Soar To Record High
Note that increase exchange inflows often lead to heightened volatility. Holders tend to sell when they send more BTC to exchanges. Hence, the bellwether cryptocurrency may encounter more volatility in the coming days, especially with the critical support being tested.
If the support at the 200-day SMA is broken, more sell orders will be triggered, pushing Bitcoin down to $40,000. Besides, the Moving Average Convergence Divergence (MACD) indicator has recently flashed a sell signal, crediting the pessimistic outlook.
BTC/USD Daily Chart
The Relative Strength Index (RSI) affirms the bearish grip, hinting at the pulldown lasting longer. Perhaps support at $44,000 and $42,000 will avoid losses toward $40,000.
Nonetheless, retaining the support at the 200-day SMA would encourage more buyers to join the market. In turn, pushing Bitcoin to close the gap at $50,000.