As claimed by the data from Glassnode, the number of millionaire Bitcoin holders surpassed 20,000. Despite the fact that the figure indicates numerous investors are profitable after BTC’s recent rally, it might also indicate a top sign.
Glassnode analysts twitted:
In the past 20 days, the price of Bitcoin has increased by around 31%. It massively outperformed both gold and the U.S. stock market.
A Minor Take-Profit Pullback May Likely Occur
When Bitcoin’s price increases so swiftly in a short period, the cryptocurrency market often becomes vulnerable to a pullback.
There is a large number of investors holding onto high unrealized profits. Although the high time frame technical structure of BTC remains highly optimistic, there is a risk that investors might take profit.
Cole Garner, an on-chain analyst, hinted that a “hell handle” could come soon. Following a significant BTC run-up during the previous bull cycles, the dominant cryptocurrency saw large short-term corrections.
In the past 24 hours, Bitcoin rose by 6%, despite the growing expectations of a minor pullback. But, Garner said a “hell candle” could follow after one more market upsurge. He said:
“Dynamic RSI on the daily. Hell candle has followed pretty much every DRSI overbought signal that prints > 75 since the beginning of the last bull market. Though a leg up sometimes happen first, as it did today.”
There’s Always A Wildcard
While the expectations of a market pullback after such a massive rally are typical of previous rallies, there is one variable.
Even during the 2017 craze, the Bitcoin futures market accounted for many past bull markets’ market volume.
This time around, due to the decline of BitMEX and an overall drop in futures activity relative to previous cycles, the spot market is leading the rally.
Therefore, whether investors in the spot market would be compelled enough to sell at the $13,875 resistance level remains to be seen.
The $13,875 level has acted as a massive level of resistance for sellers throughout the last three years on the weekly chart.
But a counter-argument to that is that there is little resistance above $13,000 to the all-time high at $20,000. As such, there is a strong possibility that retail and institutional investors could continue to bid above $13,000, expecting a run-up to the record-highs.
A well-known pseudonymous trader is known as “Loma” twitted:
“If BTC dumps back down to ~$12,500 area, I’d be surprised. Off the top of my head, I can’t think of many examples where a bullish assets in a bullish trend gives back the entire expansion.”