The price of Bitcoin (BTC) is volatile. After hitting $ 14,100 for the first time since 2017, there has been a sharp pullback. However, key on-chain data and whale clusters show that individual high net worth investors are holding their positions.
This trend shows that whales do not expect a major retreat in the short term. Low whale activity is a positive measure that follows a strong upward trend. It shows that the whales have no interest in selling BTC just yet and are likely to expect a wider rally.
In the short term, Bitcoin’s support areas are at $ 12,900 and $ 13,300. The stability of the dominant cryptocurrency over the two levels despite various macro factors is an optimistic trend. The US elections are ongoing, and while BTC posted a 4% decline, it has been relatively resilient.
Investors appear confident
Two key on-chain indicators show that whales and retail investors are generally not actively selling Bitcoin. First, the leverage ratio estimated by BTC shows that trading in derivatives is not decreasing. This shows that investors are not proactively closing their positions or transactions given the uncertainty surrounding the US presidential election.
However, once the election results have become known, the high debt ratio estimated by BTC carries the risk of increased volatility. Ki Young Ju, CEO of CryptoQuant, told Cointelegraph: “The estimated leverage ratio per BTC on derivatives exchanges will increase by election day. This could lead to high volatility in the BTC price due to cascading liquidations. “
The term “cascade settlement” refers to a situation in which futures contracts are settled one after the other in a short period of time. For example, if short sellers are increasingly betting against Bitcoin and the price of BTC is still rising, this can result in the shorts being liquidated one by one. In this case, cascading liquidations occur, which leads to increased volatility.
Second, fewer whales are selling on US exchanges normally used by whales like Coinbase Pro and Gemini. According to CryptoQuant, there is little bitcoin listing on US exchanges, which means there is less risk of short-term whale sales for the foreseeable future. Ju explained:
“Whales are not currently active on US exchanges. The average input to spot exchanges is the average amount of bitcoin deposited on spot exchanges, including US exchanges like Coinbase Pro, Gemini, Bittrex, and others. It’s helpful to investigate the short-term risk of whale dumping. “
On October 12, for example, the inflows on US stock exchanges suddenly surged above the danger zone. As soon as they didBitcoin fell sharply in a short period of time. In the past two weeks, Bitcoin inflows to exchanges have been well below the danger zone. This will reduce the likelihood of a short term sharp correction.
Whale clusters show that Bitcoin is oversold
Whale map he found that there are two short-term technical levels that serve as important areas. Based on the whale groups, the values of $ 12,987 and $ 13,650 are critical. Whale clusters arise when newly purchased BTC is held in place. The clusters show areas where whales have previously bought Bitcoin and are often viewed as levels of support.
Since the price of Bitcoin is below USD 13,650 as of November 3rd, calling for USD 13,650 and staying above these values would confirm this as a support level. So in the short term, it’s important for buyers to climb above $ 13,650 to continue the rally. Bitcoin saw a positive technical trend for the past week, defending the $ 13,000 macro support area. As long as BTC stays above the $ 13,000-13,500 range, the short-term uptrend is intact.
In technical terms, whale map explained that the daily chart of Bitcoin shows that the cryptocurrency is oversold. The Relative Strength Index (RSI) is an indicator that measures the dynamics of Bitcoin and whether it is overbought or oversold. On the daily candlestick chart, the RSI shows that BTC is currently oversold. said Whale map. “”The monthly candle swept the 2019 high and closed below. Blue areas [16.000 dólares] They mean important macrofibers. I hope the big guys take profits there“.
According to the daily chart, the range of $ 13,000-14,000 is an area of interest to sellers. If Bitcoin stays stable above $ 13,000 and claims $ 14,000, the next level of resistance is $ 16,000. So that the short-term upward trend of BTC intensifies, The daily chart, which marks a closing price above $ 14,000, is vital in November. In that case, as in December 2017, BTC could hit a new all-time high in December.
Two main variables in Bitcoin’s short-term price trend
Bitcoin miners have been selling ever larger amounts of Bitcoin since mid-October. During the rainy season in northern China, which usually begins in the fall, miners increase their capacity to benefit from cheaper electricity. Since areas like Sichuan are dependent on hydropower, the rainy season results in lower electricity costs. But when the rainy season comes to an end, many miners abruptly stop mining BTC.
According to ByteTree, miners have sold a ton of bitcoin in the past week. In the past seven days Miners’ net inventory changed by a negative 1,060 BTC, meaning miners sold 1,060 BTC more than they minedThis leads to significant sales pressure in the market. As a result Bitcoin saw the second largest negative mining difficulty adjustment change in history as miners stopped mining BTC in droves. Glass knot wrote::
“We just saw the second largest negative adjustment in #bitcoin mining difficulty in history: -16%. It exceeded the -15.9% change in March of this year. The only time the difficulty a The greatest Downward revision (-18%) took place more than 9 years ago in October 2011. “
There is a possibility that less selling pressure from miners will add to Bitcoin’s momentum. Due to the likely demise of the miners selling BTC, the US election will have a bigger impact. Analysts, including Alex Krüger, said a Democratic Congress or the election of Joe Biden would likely spice up sentiment around Bitcoin.
If Biden is elected, Kruger said The gold, bitcoin, and safe-haven fortunes would likely appreciate in value due to significant uncertainty in the stock markets and prepare for additional regulation and potentially higher tax rates.
If President Donald Trump is re-elected, it would lead to a surge in risk-weighted assets, which could cause BTC to skyrocket at the same time. Barry Silbert, CEO of Grayscale – a cryptocurrency investment firm – said that both Trump and Biden’s victories would benefit Bitcoin.