Bitcoin implosion from record highs of $41,000 continues to gather steam amid a surge in selling pressure. The flagship cryptocurrency is down by more than 12% from its all-time high, having struggled to bounce back after a steep pullback.
For the first time in over a week, the cryptocurrency slipped below the $33,000 critical support level at the back of surging selling pressure. The sell-off came on the cryptocurrency trading in a tight trading range for the better part of the week without a clear direction.
However, in recent days bears have taken control as bulls struggle to push the cryptocurrency back to all-time highs. Upon breaching the $33,000 support level, the altcoin has raced to lows of $29,000, with the next price target appearing to be $27,000.
A plunge to the $27,000 level would imply a 35% correction from Bitcoin all-time highs. While there is growing concerns given the amount of sell-off, veteran trader and analyst Peter Brandt maintains it is a healthy correction that will help cure a bubble that had seemingly been building after the recent spike higher.
Fuelling suggestions that Bitcoin could slip further is the fact that it is currently trading below a massive supply level. Given that a rally from $9,800 to $42,125 did not experience any major corrections, signals, a major correction could be in play.
The 10% plus sell-off is attributed to increased selling pressure at Coinbase Pro, the largest professional trading arm of the U.S crypto exchange Coinbase. The major spikes in volume at the exchange have accompanied price volatility, with the dip signaling short sellers are in firm control.
However, there is growing optimism that Bitcoin could find support at the 31,000 level. At this level, roughly 250,000 addresses purchased nearly 250,000 BTC, conversely fuelling the rally to record highs.
The new Bitcoin holders could try to prevent their investment from going into the red by defending the $31,000 support level. Likewise, the addition of more tokens into the portfolio could help support the prices conversely support a bounce back to all-time highs. However, there is also a great chance that Bitcoin could still slip to the $26,000 level seen as the next crucial support level.
The sell-off drive has coincided with an increase in deposits across various exchanges. Most of the deposits have come from whales eyeing a piece of the flagship cryptocurrency. However, it is still unclear as to whether the new whales are buying or selling BTC.
A transfer of wealth has been taking place in the cryptocurrency space in recent months. Big investors are increasingly buying the cryptocurrency as small investors exit positions to lock in profits. The latest high profile buyer to hit the Bitcoin market is investment giant Grayscale.
Immediate reports indicate that the investment firm has fixed its biggest-ever one-day BTC purchase worth more than $600 million. The company has reportedly increased its Bitcoin exposure by a further 8,000 BTC.