Bitcoin (BTC) price rebound to $30,000? 3 factors at play

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The crypto industry fell on hard times last week as the price of BTC fell 10% after clearing $30,000 for the first time in 10 months. But with several on-chain metrics flashing green, it looks like Bitcoin bulls may soon reverse the retracement. But when will Bitcoin be back above $30,000?

Bitcoin price was down 10% in the past week, but several on-chain indicators suggest a rebound from $30,000 is more likely than a dip below $25,000. As investor confidence in the broader crypto industry shrinks, investors are likely to reallocate funds from the altcoin sector into Bitcoin in the coming days.

Investor confidence hit its lowest level in a month.

Market sentiment around Bitcoin reached euphoric levels on March 12, the aftermath of the US banking crisis. However, since the price of BTC broke through $22,000, investor confidence has declined sharply, leading Bitcoin-weighted sentiment to its lowest level since March 2.

Weighted sentiment gauges investor expectations by comparing the ratio of an asset’s positive to negative mentions on relevant social media channels.

Looking at the chart below, Bitcoin’s weighted sentiment turned negative after falling from 1.53 to -0.70 between April 11 and April 24.

Bitcoin (BTC) price versus weighted sentiment. April 2023. Source: Santiment

The drop in social sentiment, combined with an increase in selling pressure, can cause the price to drop temporarily. However, once negative sentiment reaches a dysphoric peak, it could signal the end of the selling spree and the start of a new bullish cycle.

And historically, price has generally moved in the opposite direction of investors’ extreme social expectations. If this pattern repeats itself here, the price of Bitcoin could experience a rebound in the coming days.

Strategic BTC whales buy

On a more bullish note, a cohort of whales whose portfolio balances exhibit the strongest correlation to BTC price movements appear to be entering another phase of accumulation.

The rejection by the $30,000 resistance triggered a network-wide selloff in the Bitcoin ecosystem over the past week. But the on-chain data reveals how crypto whales holding 100-1,000 BTC bought the dip.

The graph below shows that they added 20,000 BTC to their wallet balances between April 16 and April 24.

Bitcoin (BTC) price versus weighted sentiment. April 2023. Source: Santiment

At current market prices of $27,400, the new investment from these price-savvy whales is worth nearly $540 million. When large institutional investors make such a large inflow in a short period of time, it indicates growing confidence.

Given their history of timed buying just before a rally and their influence on retail investors, such a large investment from the aforementioned whales will likely result in a bullish reversal for Bitcoin.

BTC Price Prediction: Bitcoin Needs To Recover $28,300 To Enter A Bullish Reversal

Third, IntoTheBlocks In Out of Money Around Price data shows that Bitcoin is unlikely to drop below $27,000.

Currently, the $27,500 resistance cluster of 61,000 addresses holds 13,500 BTC. This area is relatively weaker than the support of 252,000 addresses that had bought 389,000 BTC for an average price of $27,100.

To enter a bullish reversal, BTC needs to clear the next resistance zone at $28,350. However, the cluster of 1.98 million holders with a bag of nearly 756,000 BTC will present a formidable challenge. But if this resistance level is broken, BTC could surge all the way to $32,000

Bitcoin (BTC) IOMAP Price Distribution Data. April 2023. Source: IntoTheBlock

Still, the bears could invalidate the positive outlook if BTC slips below $27,000. Although, as seen above, bullish support at 252,000 addresses that had bought 389,000 BTC for an average price of $27,100 will likely prevent the decline.

But if this support level fails to hold, Bitcoin price could drop all the way to $24,500 before the bulls can regroup.

Disclaimer

In accordance with Project Trust guidelines, this price analysis article is provided for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and unbiased reports, but market conditions are subject to change without notice. Always do your own research and consult a professional before making financial decisions.

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