However, the technicals of Bitcoin prices remain bearish as the price of BTC is falling to $14,000 in Q4.
The amount of bitcoins
of cryptocurrency exchanges saw momentum on Oct. 18, suggesting weakening selling pressure, which could help BTC price avoid a deeper correction below $18,000.
Bitcoin forms a ‘bear market floor’
More than 37,800 BTC left cryptocurrency exchanges on Oct. 18, according to data tracked by CryptoQuant. This marks the largest daily outflow of bitcoin since June 17, when traders withdrew nearly 68,000 BTC from exchanges.
Additionally, more than 121,000 BTC, or almost $2.4 billion at current prices, have left exchanges in the last 30 days.
Bitcoin Netflow exchange of all exchanges. Source: CryptoQuant
An increase in bitcoin outflows from exchanges is generally seen as a bullish sign as traders remove coins they want to hold from platforms. Conversely, an increase in Bitcoin inflows on the exchange is generally viewed as bearish, as supply is immediately available to increase sales.
For example, Bitcoin fell to around $18,000 locally, when its outflows from exchanges reached almost 68,000 BTC on June 17.
This time, the massive surge of Bitcoin exiting the exchange surfaces as the BTC price downtrend breaks in the $18,000-$20,000 range.
Interestingly, Bitcoin whales, or entities with more than 1,000 BTC, are mostly behind the coin’s strong position near the $18,000 level, according to some on-chain metrics.
For example, the cohort’s accumulation trend score notes that wallets between 1,000 BTC and 10,000 BTC have been accumulating Bitcoin “aggressively” since the end of September.
Bitcoin accumulation trend score by cohort. Source: Glassnode
Additionally, on-chain behavior shows that they recently withdrew 15,700 BTC from exchanges, the largest outflow since June 2022.
Bitcoin forest deposits and withdrawal volume from exchanges. Source: Glassnode
“Bitcoin prices have shown notable relative strength of late, amid a highly volatile traditional market backdrop,” Glassnode noted in its weekly review published Oct. 10, adding:
“Several macro metrics show Bitcoin investors establishing what could be a bear market floor, with many similarities to previous cycle lows.”
Positive BTC fund inflows
Meanwhile, bitcoin-based investment vehicles also saw the fifth week of steady inflows, according to the CoinShares weekly report.
Around $8.8 million entered Bitcoin funds in the week ending October 14, bringing the net worth of these funds to $291 million in a time period to date. CoinShares head of research James Butterfill said the inflows imply “non-neutral sentiment among investors” towards Bitcoin.
Capital flows through assets. Source: CoinShares
On the downside, the technical outlook for Bitcoin remains in favor of the bears, following the formation of what appears to be an inverted cup and handle pattern on its three-day chart.
Related: Bitcoin Price ‘Easily’ Must Hit $2M in Six Years – Larry Lepard
An inverted cup and handle pattern forms when the price experiences a semi-annual rally and correction, followed by a less extreme bullish pullback. It is resolved after the price breaks below its neckline and falls as much as the distance between the peak of the cup and the neckline.
BTC/USD daily price chart with cup and inverted handle pattern. Source: TradingView
Bitcoin price could drop to $14,000 if the inverted cup holds as mentioned, according to previous reports, or a 30% drop from the current price level.
The views and opinions expressed in this document are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.