Why Bitcoin's Current Dip Could Be the Last Chance Before a Major Price Surge

Bitcoin's price momentum has caught significant attention as it gradually drops some of its recent gains. Currently, Bitcoin has plummeted 7.6% from its all-time high (ATH) of $99,645 seen last week, trading at $92,476—a 4.6% drop in just the past day.

What To Expect From This Current Bitcoin Decline

Amid this ongoing correction, CryptoQuant’s analyst BaroVirtual has pointed out a steady decline in Bitcoin reserves across major crypto exchanges. This trend suggests a market preparing for a “bull run.”

The analyst drew parallels to the March to November 2020 period, where a similar decline in exchange reserves was observed, followed by substantial inflows in December 2020 that fueled upward buying pressure.

Conclusion: The current dip in reserves indicates that participants who missed earlier accumulation opportunities may now be entering the market ahead of the next price surge.

Retail Traders Yet to Join The Market

Despite the dominance of institutional investors and high-net-worth individuals, retail traders appear to be lagging. According to another CryptoQuant analyst, Woominkyu, the Korea Premium Index—a crucial metric for retail involvement—remains below -0.5, indicating limited activity from retail participants in this rally.

Historically, the Korea Premium Index has shown spikes to extreme levels preceding Bitcoin’s price peaks. Monitoring this index could offer vital insights into potential market tops.

The absence of retail traders in the recent crypto rally is noteworthy, as their eventual participation could lead to increased buying pressure, potentially driving Bitcoin’s price further.

Currently, the crypto market is experiencing a bloodbath, with the global market cap dropping nearly 6% in the past day to $3.34 trillion. In the last 24 hours, over 206,491 traders have been liquidated, with total liquidations around $624.99 million.

Featured image created with DALL-E, Chart from TradingView