2022 has been a tumultuous year for the crypto market. Most cryptocurrencies have jumped by more than 50% from their highs in November last year, and Bitcoin is no different.
Despite falling from its $69,000 high to less than $20,000, Bitcoin started to pump last week, pulling several other cryptocurrencies up.
Bitcoin attempted another hit in October at a bullish correction in the final week, breaking the psychological $20,000 resistance. Most other cryptocurrencies followed, with cryptos like Ethereum and Dogecoin taking the lead at 30% and a whopping 102% over the last 7 days.
However, fears have begun to mount as Bitcoin now appears to be struggling at the $21,000 mark. The momentum of the cryptocurrency has been weak at best, and its bulls now appear to be tiring in their fight against the bears.
The flagship cryptocurrency broke the $21,000 resistance by a few dollars, hitting the $21,072 mark. However, Bitcoin appears to have reversed from this level without much of a fight.
After hitting this $21,000 resistance last week, Bitcoin reversed and fell to $20,020 on Friday after losing about $1,000 in price. During the weekend, the cryptocurrency attempted another hit at this resistance and was rejected again.
At the time of writing, Bitcoin is changing hands at $20,450 after bouncing from this level.
Last week's bullish rally took Bitcoin above its 20, 50, and 100-period simple moving averages on the hourly timeframes. However, after these rejections from the $21,000 zone, Bitcoin presents a real chance of going below.
If bitcoin fails to break the $21,000 zone this week and the cryptocurrency continues to trade lower, the bears may take the bulls' weakness as an opportunity to push the prices far beneath where it now sits.
On the daily chart, a bearish crossover on the RSI is starting to look like a real possibility. The MACD also shows neutral conditions, indicating that the market may be in a period of indecision.
According to the fear and greed index, the crypto market's sentiment is fear, possibly owing to Bitcoin's performance and lack of volatility around the $21,000 zone.
Bitcoin hit a six-week high in the last few days and has retraced 1.4% in price at the time of writing to the $20,500 zone. The crypto fear and greed index still indicates fear and foreshadows the possibility of the market going in either direction.
According to the blockchain analytics and data aggregation platform, Santiment, whales have entered a dilemma and may have started to dump their Bitcoin holdings.
According to Santiment, the Bitcoin whales had accumulated Bitcoin throughout 2021 but started to dump their holdings right around the end. This also coincides with the start of the current crypto winter that has decimated the market.
Despite last week's bullishness, Bitcoin was still in a huge downtrend over the long term. And while the retailers started buying the cryptocurrency during the pump, the whales and institutional investors were profiting.
According to the Spent Profit Output Ration (SOPR) metric, this profit-taking was strongest around the $21,000 zone, explaining why the cryptocurrency has failed twice to break through this level.
During the buying spree the retail investors entered last week, Bitcoin created a demand zone around the $19,000 zone and $20,800, leaving many of them with open trades around this zone that the whales will no doubt take advantage of.
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