Bitcoin [BTC] recently experienced a sharp decline, hitting lows of $76.6K on March 11 before rebounding to $82.8K in just over 24 hours. This 8.2% bounce raised questions about whether the worst of the selling is over, or if Bitcoin will continue its downward trend.

While catching falling knives can be dangerous, understanding key market indicators can offer insight into potential support levels and help investors gauge whether the price is nearing its bottom. Recent data on whale activity and Coin Days Destroyed (CDD) suggest that the most intense selling may have passed, and consolidation around the $72K mark is a possibility.

Whale Activity Shows Signs of Retreat

Whales, who are large holders of Bitcoin and have the power to influence market movements, are a key factor in determining price direction. Over the past few months, whale activity on exchanges has increased, signaling heightened selling pressure. However, recent metrics show a decline in whale activity, which could indicate that the worst of the selling is over.

An important metric to monitor is the Exchange Whale Ratio, which tracks the proportion of the top 10 inflows relative to total inflows on exchanges. A higher ratio typically signals more whale selling pressure. Since November 2024, this ratio has been steadily rising, but it has recently begun to fall. This shift suggests a decrease in selling pressure and may signal that whales are less inclined to sell at current levels.

In addition to the whale ratio, the Short-Term Holder (STH) Realized Profit/Loss ratio stands at -10.9% at press time. This ratio has been consistently negative in the past during periods when Bitcoin hit new lows, followed by consolidation phases that lasted two to three months. The current trend indicates that Bitcoin might follow a similar pattern, with a potential consolidation phase ahead.

Coin Days Destroyed: Declining Selling Activity

Another critical indicator is Coin Days Destroyed (CDD), which tracks the movement of older Bitcoin. When older coins are moved or sold, it increases the CDD metric, signaling selling activity. A declining CDD can indicate that fewer long-term holders are liquidating their positions, which is generally a bullish sign for Bitcoin’s price stability.

Since December 2024, the 7-day Moving Average (7DMA) of the CDD has made consistent lower highs, reflecting a decline in the selling activity of older coins. This decrease in selling pressure is encouraging and suggests that accumulation may soon follow. When combined with reduced whale activity, this points toward the possibility of a bottom forming in the market.

The Case for a $72K Consolidation

Despite the recent rebound, Bitcoin remains 11% below the highs of $92K seen in January. However, based on historical patterns and current metrics, a period of consolidation around the $72K level seems likely over the next few months. During this phase, Bitcoin would be expected to stabilize, potentially forming a solid base before any significant upward movement.

This consolidation around $72K could offer opportunities for long-term investors to accumulate Bitcoin at more attractive prices, especially if the worst of the selling pressure has already passed. However, while this consolidation phase seems probable, there is still the possibility of further losses if the market remains weak or if large-scale selling resumes.

Conclusion

In conclusion, while Bitcoin’s price has experienced significant volatility, indicators like reduced whale activity and lower Coin Days Destroyed suggest that the most intense selling pressure may have passed. Bitcoin could enter a consolidation phase around the $72K support level, offering a potential opportunity for accumulation. However, market conditions remain fluid, and the next few months will be crucial in determining whether Bitcoin can regain upward momentum or if further declines are ahead.