Bitcoin (BTC) fell sharply on November 26 after a massive sale of whales. Data from web data companies, Santiment, Intotheblock and CryptoQuant, show increased levels of whale exchange flows.
Whales that sold just below Bitcoin’s full-time height, especially when market sentiment was so euphoric, resulted in a huge dip. Nearly $ 1.8 billion in futures contracts have been obliterated, Cointelegraph reported.
Some exchanges, such as Binance, recorded $ 400 million in liquidation in just a few hours.
According to Sentiment, the whales were quickly sold out after Bitcoin surpassed $ 19,300. Many of these wealthy people were sold so aggressively that they no longer qualify as whales with over 1000 BTC.
The market for high-debt derivatives began to crumble as soon as the price of bitcoin fell relatively little. Eventually, BTC fell to $ 16,200 on major stock exchanges. Santiment analysts say:
BTC whales with 1,000 or more coins (currently $ 16.7 million or more) were sold almost immediately after the $ 19,300 price rise two days ago. 11 of these whales were sold enough to no longer fall into the category of coins increasing by 1000 when prices peaked. ”
Intotheblock researchers found a similar trend. The fall in the bitcoin price corresponds to the moment when whales transferred 93,000 bitcoins to stock exchanges. When the price of BTC reached its annual peak, 93,000 BTC was equivalent to $ 1.8 billion.
After the sharp collapse of the Bitcoin futures market, Bitcoin remains divided by traders and analysts. Some believe that Bitcoin is heading for a deeper decline, possibly to the support level of $ 13,800. However, others say that buyers now have an incentive to collect more than $ 18,000 BTC to take advantage of the said liquidity.
Bitcoin is falling in the short term
Bitcoin’s short-term bearish state is mainly due to two things. First, during previous bull markets, Bitcoin has historically fallen 30% or more before the rally continued. If BTC notices a similar trend, it means falling to at least $ 14,500.
Second, short-term investor activity increases when the BTC price is consolidated. Previously, a sharp increase in the number of young titles indicated a downward trend.
Cryptocurrency trader and technical analyst Edward Moura confirmed that previous beef markets have seen several sharper corrections, for example between 30% and 40%. Furthermore, the trader also reported that the 0.618 Fibonacci sequence level is $ 13,500.
By combining these two data points, Mora explains that a fall to $ 13,500 would be a “fantastic” opportunity. He said:
“Assuming we’re in a bull market, a 0.618 Fibonacci retracement is a good buy. Let’s take a look at the period from mid-2015 to the end of 2017. 6 out of 7 setbacks we fell to 0.618 Fibonacci level (the last decline fell to 0.5). Withdrawal is 30-40%. Currently, 0.618 Fibonacci retracement is around $ 13,500. If that happens, it will be a great buy. Earlier this year, we received a mini-version of it, which was also adjusted to 0.618 Fibonacci. ”
Meanwhile, cartographer and cryptocurrency investor Josh Olsevich says that local Bitcoin peaks usually occur when the unused transaction yield (UTXO) reaches 10% within one to three months.
The investor notes that it is currently 8%, which historically indicates the top of the market. He noted: “As with BDD, several currency movements in the chain are usually bearish.”
Bull issues are coming soon
Nevertheless, market sentiment regarding Bitcoin as a whole remains optimistic. Many analysts who expect BTC to fall in the short term still expect the dominant cryptocurrency to hit record highs by the end of the year. With this in mind, some traders are also optimistic about the short-term dynamics of BTC prices.
A pseudonymous trader known as “The Byzantine General” noticed that Bitcoin’s liquidity now ranges from $ 17,500 to $ 19,000. Liquidity occurs when futures market traders hesitate on one side of the market. Since liquidity is higher, this indicates that traders are likely to sell bitcoins, and that the clearance prices for overleveraged trades are around $ 18,000.
Stop and cascade filtering can work in both directions. If a massive liquidation of long-term contracts causes BTC to fall on 26 November, short liquidations could lead to a rise in BTC. Given that BTC / USD has fallen significantly in a short period of time, it is certainly possible to meet in a rally. With liquidity close to $ 18,000, the probability of this remains high.
Mira Cristanto, former Credit Suisse Banker, added that the medium- and long-term outlook for BTC remains good. He identified the bitcoin difficulty band, indicating that the price of BTC has been suppressed for a long time.