3 reasons why the price of bitcoin will soon plunge

After a long gap, the bitcoin (BTC) price is consistently showing signs of strength without a downward curve. However, a drop in the bitcoin price could still happen, especially in the current bear market scenario.

In the current range, the top crypto-currency is maintaining an impressive weekly gain of around 9%. However, some indicators on the blockchain point to a possible decline in the price of bitcoin in the near term. On the other hand, a portion of BTC investors are hoping that this rally will mark the beginning of a bullish phase.

BTC price to fall soon?

BTC has seen tremendous liquidity on the exchanges at the $21,400 level. This is a potential sign that the market is anticipating a local bottom at this level and a price decline thereafter. In addition, large investors may be looking to open short positions to take profits in the event of a price decline. According to data from Crypto Quant, huge amounts of bitcoins have been transferred to the exchange markets in a short period of time.

“Two alerts were triggered today about a high average flow of BTC in exchanges. The first was an average of 21 BTC. The second was 17 BTC.”

Overall, there is a high flow of capital in terms of BTC in the current scenario. This is evident from the growing open interest in the BTC derivatives market. In addition, stablecoins have also been sent to exchanges lately in a potential sign of investors looking to open short positions. It is also possible that investors are looking to capitalize on the possibility of a price correction.

New monthly high next week?

Currently, the price of BTC stands at $20,880, up 1.91% over the past 24 hours, according to price tracking platform CoinMarketCap. On Saturday, BTC hit a monthly high of $20,988, up about 14% from the monthly low of $18,400. It remains to be seen if the flagship crypto-currency will break through the $21,000 level before the weekend is over. This would mean that bitcoin would have hit a new monthly high after a prolonged sideways movement recently.