Bitcoin is on the verge of reaching a major milestone following its impressive rally. What fallout will this cause?

Bitcoin (BTC) appears to be approaching the $23,000 level a significant inflection point following its stunning rally in recent weeks, according to an analysis by CryptoQuant.

While traders are watching this crucial decision point closely, technical and on-chain data suggest that there is still a lot of uncertainty in the near term as to where the number one crypto asset will go.

BTC
Image by cryptoquant.com

When assessing on-chain activity, evidence indicates that bitcoin miners and short term holders have increased their selling activity.

According to CryptoQuant’s Miner Position Index (MPI) and Bitcoin Miners Outflow charts, a notable outflow of bitcoins from miners’ wallets has been observed recently, with miners looking to cash out while prices remain relatively high.

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Similarly, measures of bitcoin supply, such as earnings and short-term holders, have also jumped considerably. This suggests that short-term investors are potentially looking to make quick profits at these levels before any further declines in BTC prices.

However, larger players, including crypto-currency exchanges, appear to be exercising a great deal of caution, as evidenced by the reduction in their bitcoin reserves. This implies that they have not yet come to the conclusion that the downward trend has been broken.

With miners and short-term investors actively selling their holdings to market resistance, it remains to be seen whether the bulls or bears will eventually prevail in deciding what happens next for the price of BTC.

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If the general market sentiment is in favor of further price appreciation, then this neckline could represent a decisive break between bearish sentiment and bullish optimism in determining the next leg of the bitcoin price.

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