David Puell, an on-chain analyst, revealed several key data points on Aug. 16 based on Bitcoin’s last 4-year price cycle (BTC). The data shows that The $ 14,000 level is a crucial price point for Bitcoin due to the whale structure (Whale pile).
According to Puell, the accumulation of whales shows that many large buyers have acquired bitcoin in the $ 9,000 to $ 12,000 range. Whales that bought for $ 9,000 make relatively high profits, and those who bought the top are even.
Accumulations could lead to volatile price movements in which buyers and sellers aggressively seek to break out of the $ 12,000-14,000 price range.
TOWalk cumulations on a weekly Bitcoin price chart. Source: David puell
So is a correction or continuation of the Bitcoin rally more likely?
The data supports the arguments for both retracement and continuation. When the whales bought between $ 9,000 and $ 12,000, they have a compelling reason to make a profit in the $ 12,000 to $ 14,000 range. You have had some benefits and / or have evened out after months of stagnation.
However, if the whales are making a profit and breaking even, they may want the recovery to continue. Puell said that Expect an accumulation period in the region of $ 10,000 after the price of Bitcoin climbs to $ 12,000 or $ 14,000. Said as:
“Finally, The whales’ unspent stacks confirm that a great battle is taking place. Two players in the game: top $ 12,000-14,000 buyers who break even and current buyers who have been active in more than a year after the first high. If we get a correction it will most likely lead to another large group of re-accumulations in the $ 10,000 area (as expected from the volume profile above). If we split up, enjoy the ride. “
The current landscape of the Bitcoin market is unique compared to previous cycles. Puell said that due to macro factors – –including the pandemic– – Bitcoin showed unprecedented price movements.
For example, the price of Bitcoin fell to $ 3,596 via BitMEX on March 13, which is a 50% drop overnight. The unusual price movements Bitcoin exhibited over the course of 2020 due to unexpected external variables increase the likelihood of a rare price cycle. Puell explained:
“Looking back at just a year and a half, we had some of the most interesting market structures in any Bitcoin cycle. In several attempts at a ‘typical’ uptrend with a sharp halving of the narrative, two factors successively influenced the price Other: PlusToken and COVID-19”.
Some variables to consider
Short and medium term There are several variables that can affect the price of Bitcoin.
Over the past few months, the price of Bitcoin has shown some correlation with gold, possibly due to the uncertainty in global markets that has led investors to consider alternative stores of value. Many analysts believe that The low interest rate policies of central banks around the world and the rapid growth in the money supply are also likely to have a positive effect on the price of Bitcoin..
Don’t stop reading: