Bitcoin Dips, But On-Chain Data Suggests Bullish Accumulation

The cryptocurrency market experienced a significant shift in sentiment in the last 24 hours following a substantial price correction and billions in liquidations. Bitcoin (BTC), in particular, saw a sharp decline, a notable event given recent market trends.

Reason for Bitcoin's Decline

The recent market volatility and widespread price drops are potentially linked to the trade tensions fueled by U.S. President Donald Trump's announcement of new tariffs on Mexico, Canada, and China on February 2nd. This announcement, made on X (formerly Twitter), contributed to a market-wide downturn.

Bullish Signals Despite Price Drop

Despite the price decrease, on-chain data suggests a surprisingly bullish sentiment among traders and investors. Analysis from Coinglass and Hyblock reveals continued accumulation and a strong preference for long positions.

• Coinglass data: Shows $677 million in BTC outflow from exchanges, indicating potential accumulation by large investors and long-term holders.
• Hyblock data: Reveals that 67% of trader accounts held long positions, signifying a bullish outlook on Bitcoin.

This confluence of on-chain metrics suggests a compelling buying opportunity for Bitcoin.

Source: Coinglass

Source: Hyblock

Bitcoin Price Action and Key Levels

Bitcoin has held the crucial support level of $91,500. However, this is the eighth test of this level, potentially weakening its strength. Repeated tests of support or resistance often precede either a significant break-down or a break-out.

Source: TradingView

Bitcoin's price action and current market sentiment suggest a bullish outlook as long as it remains above $92,500. However, a daily close below $91,000 could trigger a potential 20% decline, potentially reaching $74,000.

Despite the price volatility, BTC remains above its 200 Exponential Moving Average (EMA), indicating an overall uptrend.

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