Bitcoin has dropped below $54,000 on April 20 while whale clusters suggest that the key areas for BTC to reclaim in the short term are $56,274 and $55,172.
The cryptocurrency market began to drop once again after an initial relief rally on Monday. Bitcoin dropped from $57,400 to sub-$54,000, losing the $55,172 whale cluster support level.
In the near term, it is crucial for Bitcoin to rally above $55,172 and reclaim it as a support level. Otherwise, it is at risk of testing the $51,000 macro support area.
Why are whale cluster support areas important?
Whale clusters form when whales or high-net-worth investors purchase or sell a significant amount of Bitcoin.
Since whales tend to purchase Bitcoin at an area they previously bought at to defend their position, whale clusters are often a positive indicator of strong support areas
Analysts at Whalemap, a data analytics platform that tracks whale activity, noted that there is a lot of whale volume at $58,000.
In the short term, with $58,000 acting as an area of interest, the analysts said $56,274 and $55,172 are the key near term levels to watch.
The analysts said:
“A lot of whale wallet volume was happening at around $58k. This should be an area of struggle for Bitcoin. $56,274 and $55,172 are currently important supports that have to be respected for uptrend’s continuation.
If Bitcoin does not reclaim $56,274 and continues to decline, it would mean that whales are not adding to their existing positions.
If this is the case, the $51,000 macro support level would be at risk of being tested once again, as Cointelegraph previously reported.
The $51,000 level is critical because if that breaks, it would cause the higher low structure of Bitcoin to break down, which may put the entire Bitcoin bull market in danger.
“These are the key levels to look out for right now,” Whalemap analysts added.
There was an accumulation at the current level but if 55k does not hold we could easily go down to 47,438 where a strong support level is located.
Both whales and hodlers responsible for sell-off
On April 18, the price of Bitcoin fell sharply from the $60,000 mark to nearly $50,000 on the day’s lowest point.
According to the analysts at Whalemap, it weren’t just long-time holders that sold, but also whales and high net worth investors.
“Since Whalemap allows to track where the HODLer coins are coming from we can check that the coins transacted yesterday were originally purchased after the halving in 2020. Checking the whale outflow map shows that the HODLer coins moving yesterday were actually not just HODLers but also whales since the bubbles are in the same locations.”
Based on this trend, it is difficult to speculate whether Bitcoin would see a major rally in the near term and resume its uptrend once more.
Several notable traders shared a similar sentiment. Pseudonymous trader, “Trader XO,” said that while he is not bearish he does sees the potential of a deeper retracement.
“BTC Currently no position. Wouldnt say no to a deeper retracement around the 0.5 – 0.705 fib levels. Not bearish – Just wanting a better buying opportunity.”