Bitcoin (BTC) fell 10% in a single day on September 4th. After the decline in sentiment in the cryptocurrency market, they became noticeably more cautious, with the index of fear and greed for the cryptocurrency highlighting “fear” first. Since July.
However, market data shows that whales are preparing to buy bitcoins at a support level of $ 8,800. This indicates that a similar decline is unlikely to occur on March 13th, when BTC fell to $ 3,600.
Why did Bitcoin fall and why are whales betting?
Analysts mainly link the Bitcoin correction to the sale of the two metals. Prior to the decline, analyst firm CryptoQuant indicated that its mining pools had switched to selling BTC.
After tracking outflows from large pools, the data showed that the miners were transferring unusually large amounts of bitcoin to exchanges. Shortly thereafter, the bitcoin price began to decline, eventually dropping below $ 10,000. The researchers said:
Since yesterday, miners have been moving in extraordinarily high volumes of #BTC. #Poolin, #Slush, #HaoBTC took bitcoins from mining wallets and sent a portion to the exchange. ”
When Bitcoin initially reverses trend, it tends to expand to the longest support or resistance level. For example, BTC fell to $ 3,600 on March 13th before a major rebound. From April to September, Bitcoin grew from $ 3,600 to more than $ 12,000.
As such, whales can expect Bitcoin to fall to lower support levels, which include $ 8,800.
Network analyst Cole Garner commented today: “Nice to see you again, Bitfinex whale.” “Smart money offers $ 8,800. I expect the bottom is probably there.”
The data may indicate that whales expect a major downturn in the near future. But it also shows that whales are not expecting a major correction from previous Bitcoin withdrawals.
Bitcoin has increased by 247% since March, so the correction is likely not to be surprising to many traders. As reported today, Raul Pal, CEO of Global Macro Investor, said that withdrawing 25-40% of funds in a bull market is typical for Bitcoin. He don:
In post-half bulls, Bitcoin can often retrace 25% (up to 40% + in 2017) and ignore short-term traders (or give swing traders a chance on the short side). Each of them has the opportunity to purchase. Future opportunities for DCA? ”
What will happen to Bitcoin next time?
Whale data provider Whalemap said many so-called “scammers” panicked about selling bitcoins when they fell. The rapid withdrawal of BTC may have alerted investors, given the severity of the fall. Whalemap sa:
“Yesterday there was a lot of panic from HODLers who were successful in buying tops. It seems their strategy is: buy high and sell low.”
Yesterday’s correction was a mixture of whale earnings and investor panic, and this may increase the chances of lower volatility in the short term.
In the short term, Michael Van de Pope, a full-time trader on the Amsterdam Stock Exchange, said bitcoin may be close to forming a bottom. Van de Poppe had been looking forward to a period of consolidation and said this decline in markets may not mark the end of the current peak season. He said:
“In my opinion, we are on the verge of reaching the bottom of the BTC dollar in these areas, in conjunction with the CME gap. Actively working on the bounces that HL needs to confirm support. The crazy high season continues for the next few months.”