On-chain data shows that bitcoin whales have potentially increased their sales recently, something that could lead to a drawdown of the asset.
The proportion of whales in bitcoin exchange has recently skyrocketed
As explained by an analyst at CryptoQuant Quicktake btc-price-will-facilitate-a-healthy-cor” target=”_blank” rel=”nofollow”>mailbitcoin price could correct towards the $31,000 to $32,000 range due to the current selling pressure from whales.
The relevant indicator here is the “whale exchange index”, which measures the relationship between the sum of the top 10 transfers to exchanges and the total currency flow.
The 10 largest transactions targeting these platforms typically come from whales, so this ratio can tell us how whale entry activity currently compares to the rest of the market.
These huge investors can transfer their coins to these central entities for a variety of purposes, one of which could be selling. Therefore, when whales take up a large portion of total currency inflows, it is a potential sign that the selling pressure being exerted by this cohort is increasing.
Historically, the indicator crossing the 0.90 mark has been especially bearish for the cryptocurrency. At this level, 90% of the total inflows come from the whales’ wallets.
Now, here is a chart showing the trend in the 72-hour moving average (MA) bitcoin trading whale ratio over the past few months:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/11/Bitcoin-Whales-Increase-Sales-Will-BTC-Fall-Below-32000.png" alt="Share of bitcoin Exchange Whales” width=”1280″ height=”613″ loading=”lazy” data-recalc-dims=”1″/>
The 72-hour MA value of the metric seems to have gone up in recent days | Source: btc-price-will-facilitate-a-healthy-cor" target="_blank" rel="nofollow">CryptoQuant
In the chart above, the quant has marked the 0.90 level in red and has highlighted the points in the bitcoin price corresponding to the cases where the 72-hour MA Trading Whale Index crossed this line.
The analyst notes that in all of these cases, the cryptocurrency first recorded some volatility and then observed a short-term decline, leading to a local bottom formation.
Given the close timing, it seems possible that the largest inflows of whales during these cases were made, at least in part, for sales purposes.
It can be seen from the chart that the indicator has recently risen back above the 0.90 level, suggesting that the whales have significantly increased their inflows.
Naturally, these high values of the metrics do not necessarily have to be bearish for the asset, as it is possible that this cohort is simply opening positions in the derivatives market this time (and to some extent, it has to be true in any of the two cases). case, like the future bitcoin-open-interest-overheat-brace-volatility/” target=”_blank” rel=”nofollow”>Open interest has seen an increase. in the last days).
However, given the pattern it has followed in recent cases, the quant says: “I expect greater volatility in bitcoin and anticipate a new local bottom with a drop to the range of $31,000 to $32,000, which previously acted as resistance.”
btc Price
bitcoin has failed to find any direction in recent days as the coin has been consolidating above $34,000. However, if the whale exchange ratio is anything to go by, things could soon change for the asset.
<img decoding="async" class="alignnone size-medium aligncenter" src="https://www.tradingview.com/x/2TaEg1VL/" alt="bitcoin price chart” width=”1534″ height=”869″ loading=”lazy”/>
Looks like btc has continued to move sideways recently | Source: BTCUSD on TradingView
Featured image by Rémi Boudousquié on Unsplash.com, TradingView.com charts, CryptoQuant.com
