Bitcoin (BTC) is going through a volatile time. After the company raised $ 14,100 for the first time since 2017, a sharp decline followed. However, key network and whale group data shows that high net worth retail investors have their positions.
This trend shows that whales do not expect a major reversal in the short term. Low whale activity is a positive target that follows a larger trend. It looks like the whales are not interested in selling bitcoins yet and are probably expecting a broader rally.
In the short term, Bitcoin support zones are at $ 12,900 and $ 13,300. The stability of the dominant cryptocurrency at two levels, despite various macroeconomic factors, is an optimistic trend. The elections in the United States are still ongoing, and although BTC fell 4%, it was relatively stable.
Investors seem safe
The two main indicators in the chain show that whales and retail investors do not usually actively sell bitcoin. First, the calculated BTC leverage ratio shows that trading in the derivatives market is not declining. This indicates that investors are not closing their positions and trading ahead of time due to uncertainty about the US presidential election.
However, after the election results become known, BTC’s high calculated leverage ratio poses a risk of increased volatility. “The estimated leverage ratio for BTC on derivatives exchanges is increasing until election day. This could lead to high volatility in the bitcoin price due to successive liquidations, ”CryptoQuant CEO Ki Yong Joo told Cointelegraph.
The term “sequential settlement” refers to a situation where futures contracts are settled continuously for a short period of time. For example, if card sellers are increasingly betting on bitcoins, but the price of bitcoins rises, this could lead to short positions one after the other. When this happens, it causes successive exceptions, increasing volatility.
Second, fewer whales such as Coinbase Pro and Gemini are traded on US stock exchanges, which are often used by whales. According to CryptoQuant data, there is little bitcoin flow to US stock exchanges, which means that the risk of short-term selling from whales is decreasing for the foreseeable future. Joe explained:
“Whales are currently inactive on the US stock exchanges. The average spot flow of exchanges is the average amount of bitcoins deposited on spot exchanges, including US exchanges like Coinbase Pro, Gemini, Bittrex, etc. It is useful to see the risk of whale dumping. Short term “.
For example, on October 12, inflows to the US stock market suddenly exceeded the danger zone. When this happened, Bitcoin plummeted in a short period of time. Over the past two weeks, production flows have been well below the danger zone. This reduces the likelihood of a sudden correction in the short term.
Whale groups show bitcoin is oversold
The whale map showed that there are two technical levels in the short term that serve as important areas. Based on the data on whale groups, the levels of $ 12,987 and $ 13,650 are critical. Whale populations form when newly acquired BTC stays in place. The panels show areas where whales have previously bought bitcoin and are often considered support levels.
As Bitcoin’s price fell below $ 13,650 as of November 3, a $ 13,650 recovery and keeping higher would confirm this as a support level. Therefore, in the short term, it is important that buyers continue to rally on a rally above $ 13,650. Bitcoin created a positive technology trend last week, defending its total support area of $ 13,000. As long as BTC remains above the $ 13,000-13,500 range, the short-term trend will continue.
Technically, Whalemap explained that the daily Bitcoin chart indicates that the cryptocurrency is oversold. The Relative Strength Index, or RSI, is an indicator that measures the speed of Bitcoin and whether it is overbought or oversold. Whalemap said on the daily candlestick chart that the Relative Strength Index shows that Bitcoin is currently oversold. “The monthly candlestick peaked in 2019 and closed below it. Blue areas [$ 16,000] indicate a significant discrepancy. I expect big people to make money there. ”
Based on the daily chart, the site is of interest to sellers between $ 13,000 and $ 14,000. So if Bitcoin remains stable above $ 13,000 and recovers $ 14,000, the next resistance level would be $ 16,000. To bolster BTC’s short-term bullish stance, the daily chart indicating close to the $ 14,000 mark is pivotal in November.