Bitcoin started this week with impressive momentum, climbing out of the weekend slump to reach almost $89,000, its highest point in several weeks! But then, its price suddenly met strong resistance and fell below $87,000. Market data highlights four key factors driving this correction.
Wall Street and crypto markets are nervous about potential tariff changes under the Trump administration. Since Bitcoin still follows Nasdaq closely during uncertain times, the market is seeing increased volatility that will probably continue until the April 2nd announcement. Many traders are sitting on the sidelines until this clears up.
On-chain data shows whale accounts sold over 20,000 Bitcoins worth approximately $1.8 billion when BTC’s price peaked. Glassnode stats reveal a clear pattern—whales who aggressively bought last month suddenly flipped to generating profits. The actions of whales (smart money) speak louder than their words. Therefore, watch out for on-chain data and movements.
Always follow what smart money does—not what it says. Whales might promote ‘bullish’ sentiment, but if on-chain data shows they’re selling, believe their actions, not their words.
An interesting development is the noticeable shift in strategy among large holders. During February dips, they aggressively accumulated assets. However, recent activity showcases a clear move towards distribution. Historically, such behaviour shifts from whales often signal short-term top forming—a pattern observed in previous cycles.
Just as market sentiment was beginning to improve, wallets connected to the infamous Mt. Gox exchange suddenly transferred BTC worth over $1 billion. The market immediately reacted with fear, and for good reason.
Elliott Wave analysis suggests the market recently completed a five-wave upward structure. The recent drop resembles a classic Wave A correction, while the current rebound appears to be a Wave B pattern, characterised by a lower-high formation.
If this analysis proves correct, a Wave C drop may follow, targeting two critical support zones:
However, this bearish scenario would be invalidated if Bitcoin breaks above $106,450 with strong volume. Such a move would signal the continuation of a bullish trend instead of a correction pattern.
Despite short-term bearish signals, the next potential pullback (Wave C) could be exciting, as Bitcoin has shown incredible performance during Q4 in almost every major cycle since 2013.
Source: Cryptorank
Historical data shows:
So, it looks like a perfect chance to accumulate before a potential year-end rally. Some investors have already started scaling into positions between the $86,000 and $84,000 range and will add more if deeper correction occurs.
Despite the influx of positive news supporting the crypto market, particularly Bitcoin—such as the Trump administration’s pro-crypto stance, the appointment of a crypto-friendly SEC chair, and increasing adoption of Bitcoin by multiple countries—we may see Bitcoin fluctuate in the short term. It’s crucial to remain mindful of the risks, as market sentiment can shift quickly.
At this stage, the primary focus should be on how far the Wave B bounce progresses. Its strength—or lack thereof—will offer important clues about the market’s next move. Additionally, monitor whale wallet activity (are large holders buying the dip?), futures market positioning, and any emerging signals from regulatory bodies.
This article is for informational purposes only and not intended as investment or financial advice. It contains opinions and speculations that are subject to change without notice.
The author and publisher disclaim any liability for decisions made based on the content of this article. Readers are advised to conduct their own research and consult a financial advisor before making investment decisions.
