As another wild week filled with liquidations and panic selling wraps up, a short-term rally managed to push BTC (BTC-USD) prices just north of $42,000. The ecosystem is seeing an increase in retail investors, so dipping prices are still a sign of renewed interest.

The Fundamental Look

Following a 24-hour low of $40,783.73, BTC prices have crawled back above $42,000 and are currently trading at $42,650.29. BTC price must reach $43,600 resistance to reverse recent downtrend. But data from BTC futures options and BTC options shows that there are high-level indicators of distress. 

Over the last 25 days, every attempt to break BTC’s downward trajectory has faced some form of interruption. Whether due to the ripple effects of the recent Evergrande (EGRNF) crisis, the U.S. Senate’s failure to extend the debt ceiling to avoid a partial federal government shutdown, or the renewed crackdown on cryptocurrencies by the Chinese government, prices have struggled to inch higher. 

Despite BTC’s trading at an ‘uninspiring’ range of $40,000 to $43,000, BTC whales are keeping calm and transferring more coins around the network in recent weeks, even more so than during BTC-USD’s run above $60,000. Bitinfocharts data supports this truth. The third-largest cryptocurrency whale, which added 321 more Bitcoins to their BTC holdings, now has a total amount of 111.794.59 BTC. This is approximately 0.5939%.

Material Indicators, an on-chain analytics tool that tracks crypto transactions shows institutional investors are still accumulating it while the smaller whales sell. Underscoring this point, Morgan Stanley (NYSE:) Europe Opportunity Fund has become the second-largest investor in Grayscale Bitcoin Trust (GBTC), with recent regulatory filings indicating that the company owns 58,116 shares.

Mining news has revealed that publicly-traded miners have become more prominently on investors’ radars. BTC rose by 290% over the past year, jumping from $10,695 up to just over $42,000. However, shares of Marathon Digital Holdings, a North American crypto mining firm, saw a 1,641% increase in shares over that same time period. 

A wave of new implementations has seen the Lightning Network’s (LN), which is a Bitcoin layer-2, increase in number of nodes. Glassnode reports that Lightning Network nodes attained a record number of 15,600 last September. This is an increase from the 6,000 recorded in August.

Whales of the Week

September 23: 2,918.489 BTC moved from multiple addresses to an unknown walletSeptember 24: 7,628.083 BTC moved from multiple addresses to an unknown walletSeptember 25: 2,729.319 BTC moved between unknown walletsSeptember 26: 1,992.219 BTC moved between unknown walletsSeptember 27: 1,992.164 BTC moved between unknown walletsSeptember 28: 2,500.000 BTC moved from multiple addresses to an unknown walletSeptember 28: 6,960.000 BTC moved from multiple addresses to an unknown wallet

The Technical Take

After inching higher earlier in the week, a sharp selloff on September 24th quashed the gains, sending BTC-USD prices lower for the remainder of the week. Bitcoin declined -4.07% over the past seven sessions but has managed to outperform (ETH-USD) and (ADA-USD), which have fallen 6.28% and 5.57%, respectively.

BTC prices fell week over week, but they still found support at the 50.0% Fibonacci retracement level. This means that there is an uptrend in the near term, even with the substantial correction. Should a rebound occur, then the 38.2% level which corresponds to $43,700 will be the next level of concern. The pair is still below the 50-day, 200-day moving averages that act as resistance to the upside at $45,400, $46,600.

BTC-USD is now able to move to the upside in a short term from its downward trending parallel channel. It is possible that the move could be accompanied with higher volumes, but it may indicate an eventual reversal higher if sustained. A break above $43,400 could open the door to a possible test at $44,100 or $44,900.

The pair’s decline should continue, so traders must keep an eye out for $40,000. Also, $40.150 and $39.650 are still holding as secondary support and tertiary levels.

Reuben Jackson had no position at the time this article was published.

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