The price of Bitcoin (BTC) turns out to be relatively stable at USD 16,000. far superior to both safe and risky assets, including Gold and stocks. But in the short term, The digital asset faces a major hurdle in the form of whales.
November 12th Bitcoin’s price hit $ 16,199, a level not seen since the famous bull market in 2017. Although BTC fell to $ 15,600 in a matter of hours, it rebounded quickly and at this point it appears that the digital asset will be trying to break above the intraday high.
Bitcoin has shown resistance above $ 16,000, which has historically been a very significant turning point. As BTC crossed this crucial area, market sentiment regarding the leading cryptocurrency has become overwhelmingly bullish.
But still, This could leave Bitcoin and the broader market vulnerable to a whale sell-off. Individual wealthy investors who own large amounts of BTC are known as whales and prefer to sell when there is enough liquidity.
For the most part, the periods of highest liquidity are when the price of BTC rises with significant market optimism.
On-chain data suggests that a whale-induced sell-off of BTC is possible
Whales have more BTC than usual and there was one Increase in whale stocks on major stock exchanges.
These two data points They show us that there is a high likelihood of a short-term whale sell-off.
If the Exchange whale ratio (How many whales have their money on an exchange) exceeds 85%, indicates that a correction is likely. Ki Young Ju, CEO of CryptoQuant explained that 85% is the correction level and 90% is the indicator dump level.
Since the Exchange Whale Ratio is close to 85%, Ki said “massive dumping” is unlikely but that we will likely see small corrections.
This data is in line with a Santiment report that found that the number of large Bitcoin whales peaked annually.
Santiment analysts suggested this The number of whale bitcoin addresses that own more than 10,000 BTC and hit 111 confirms the whales’ trust.
While this is correct, it also means that the Bitcoin market currently has an unusually high number of whales. So, When whales start making a profit it could cause a fall in the near future. Santiment analysts wrote:
“Would you like to confirm that Bitcoin whales trust their assets? The number of addresses with at least US $ 10,000 BTC just matched a 2020 high of 111. Even those with US $ 1,000 to US $ 9,999 BTC are now only 6 below the all-time high of 2,135 wallets. “
The future is not so bright for Altcoins
Alternative cryptocurrencies (Altcoins) are currently in a precarious position due to the current Bitcoin price cycle.
If the price of Bitcoin goes up, it will continue to absorb the volume of the cryptocurrency market. As a result, altcoins would underperform against Bitcoin and possibly against the US dollar.
On the other hand, If the price of Bitcoin falls, it could shake the market and cause a significant correction in the altcoin market. A pseudonymous crypto derivatives trader known as “CoinMamba” wrote::
“I would avoid using ALT for a long time for the time being. If BTC goes down, they’ll make it hard. If they move, you will have plenty of time to make good entries. So be patient my friends. “