David Puell, analyst at the chain, set several key data points on August 16 based on the latest 4-year cycle of Bitcoin (BTC). Data shows that the $ 14,000 level is a major price point for Bitcoin due to whale conglomerates.
According to Boyle, Walclusters is offering many large buyers to buy in the $ 9,000 to $ 12,000 range. Whales that bought for $ 9,000 are making relatively high profits, and those who have bought the peaks are at break even.
Clusters can lead to volatile price action, as buyers and sellers aggressively try to break the $ 12,000- $ 14,000 price range.
So is a correction more likely, or is Bitcoin’s continued rally?
The data supports the arguments for both withdrawal and continuation. When it buys whales for $ 9,000 and $ 12,000, it has a compelling reason to turn a profit in the $ 12,000 to $ 14,000 range. You have seen some gains and / or you are compensated after months of recession.
On the other hand, if the whales are profitable and break even, they may want to continue the rally. Boyle said he expects a build-up period in the $ 10,000 region after BTC moves to $ 12,000 or $ 14,000. He said:
“After all, unspent piles of whales confirm a great battle. Two players play a role: the big buyers between the ages of 12 and 14,000 who hit the breakeven price and the current buyers who have been active after the first higher rally in more than a year. If we get a correction, it is likely. That leads to another large set of re-accumulation in the 10,000 range (as expected from the volume profile previously). If we do break out, enjoy the ride. ”
The current landscape of the Bitcoin market is unique compared to previous cycles. Boyle said Bitcoin has seen unprecedented price movements due to macro factors including the epidemic.
For example, Bitcoin’s price fell above $ 3,596 on March 13th on BitMEX, a 50% drop overnight. The extraordinary price movements in Bitcoin over the course of 2020 due to unexpected external variables increase the likelihood of an abnormal price cycle. Boyle explained:
“In just a year and a half, we have had some of the most interesting market structures of any Bitcoin cycle. In many attempts for a ‘typical’ uptrend with the narrative drastically halved, two swans hit the price in a row: PlusToken and COVID-19.”
Some variables to consider
In the short to medium term, there are many variables that can influence Bitcoin’s price.
In the past few months, Bitcoin has seen some correlation with gold, possibly due to the uncertainty in global markets that has prompted investors to consider alternative stores of value. The low interest rate policies of central banks around the world and the rapidly increasing money supply are also likely to have a positive effect on the bitcoin price, according to several analysts.