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Analyst Who Predicted Bitcoin’s 2018 Lows Says Another Drop Is Likely

  • Bitcoin has undergone a strong drop since the highs of $19,500 seen last week
  • A historically accurate analyst says that further losses are likely for the cryptocurrency
  • The analyst shared a chart showing that Bitcoin is likely in the midst of trading in a dead cat bounce prior to further losses
  • He cited the Elliot Wave form of technical analysis, which predicts that markets move in predictable waves.

Bitcoin Could Drop Toward $15,000

Bitcoin has undergone a strong drop since the highs of $19,500 seen last week. Even after a strong recovery from the lows, the leading cryptocurrency trades for $17,600, far from those highs.

Analysts are mixed over what this correction means for the Bitcoin bull market: some think that the drop was a necessary correction before a stronger move higher. Others think that the drop is the start of a bigger correction that will likely end in the coin falling toward the $12,000-14,000 technical region.

A historically accurate analyst is currently leaning toward the latter option.

The trader recently shared a chart showing that Bitcoin is likely in the midst of trading in a dead cat bounce prior to further losses. This next drop, the analyst suggests, could bring the cryptocurrency toward the $15,000 region.

The chart below was shared along with this assertion. The chart shows Bitcoin’s recent price action, along with the assertion that it may be trading in an Elliot Wave pattern that may take it to $15,000:

“you love to see it, looking for another pop higher into 18k before opening some shorts. to me this is a clear abc up after a 5 wave decline, and complacency looks to be kicking in.”

The trader that shared this chart is the same one that in the middle of 2018 predicted that Bitcoin would fall as low as $3,200. He was proven almost exactly correct when the coin bottomed on top exchanges at $3,150 just months later.

Image

Chart of BTC's price action over the past week with an Elliot Wave analysis by historically accurate analyst Benjamin (@SmartContracter on Twitter)
Source: BTCUSD from TradingView.com

Not the Only One That Thinks So

This analyst is far from the only one expecting a further drop.

Bob Loukas, a crypto cycle analyst, noted that the cryptocurrency regularly fell by 30% last market cycle, prior to moving to new highs:

“Most have a short memory. Remember in Jan 2017 just shy of #Bitcoin ATH’s, boom 34% decline. The 2 months later a sharp rally, new ATH’s, and double boom 34% decline. Never a one way street.”

Bitcoin has only dropped by around 15% from its highs. A full-blown 30% correction would mean that it drops to the $14,000 region.

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Analyst Who Predicted Bitcoin's 2018 Lows Says Another Drop Is Likely

Source: Bitcoinist News

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Breaking Down the Effect of Bitcoin’s $3,000 Drop on the Futures Market

  • Bitcoin has undergone a strong drop since peaking at $19,500 just days ago
  • The coin currently trades at $17,000 as of this article’s writing
  • Analysis compiled by Coinalyze found that over the course of the past few days, $1 billion worth of open interest has been wiped from leading Bitcoin futures exchanges
  • This was accompanied

How the Strong Bitcoin Drop Affected the Futures Market For BTC

Bitcoin has undergone a strong drop since peaking at $19,500 just days ago. The leading cryptocurrency currently trades for $17,000, far below the highs.

The drop came in a short period of time, with liquidations pushing Bitcoin dramatically lower in a wave. The issue was that many market participants were overleveraged, meaning that a small correction triggered liquidations and stop losses, resulting in a rapid cascade lower.

Analysis compiled by Coinalyze found that over the course of the past few days, $1 billion worth of open interest has been wiped from leading Bitcoin futures exchanges.

This was also marked by a spike in trading volume, of $66 billion on futures exchanges and $7 billion on spot exchanges.

These two data points in tandem suggest that the recent correction marked a needed correction in the Bitcoin market to ensure that derivatives players were not getting too far overleveraged.

After the strong correction, the funding rates of top Bitcoin futures markets have reset. The funding rate is the rate that long positions pay short positions on a recurring basis to make sure the price of the future stays in line with the spot market.

According to ByBt, a crypto derivatives tracker, the funding rates of most leading exchanges have reset to the baseline of 0.01% per eight hours. Further, on OKEx in particular, the funding rates of many pairs have actually trended into a negative region, suggesting an increasing number of short takers.

Bitcoin may revert higher if there continues to be low and even negative interest rates and if consolidation takes place.

Par for the Course

Many say that this correction is par for the course in that it should be expected.

Bob Loukas, a long-time Bitcoin investor and macro analyst, recently pointed out that the previous bull run was punctuated with drawdowns similar to the one taking place now:

“Most have a short memory. Remember in Jan 2017 just shy of #Bitcoin ATH’s, boom 34% decline. The 2 months later a sharp rally, new ATH’s, and double boom 34% decline. Never a one way street.”

Countless others in the space have corroborated this, arguing that it is actually healthy for bullish markets to pull back.

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Macro Analysis Predicts Bitcoin Has Begun Rally Toward $100k

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Bitcoin Fundamentals Remain Great Despite $3,000 Drop From Highs: Analyst

  • Bitcoin has dropped dramatically from its $19,500 highs
  • The coin fell as low as $16,200 earlier today amid a strong sell-off and a lack of buying support
  • Some think that the $3,000 drop could be the start of a deeper retracement in the months ahead
  • Willy Woo, a prominent on-chain analyst, remains optimistic.

Bitcoin Drops Dramatically From $19,500 Highs to $16,200 Lows

Bitcoin has dropped dramatically from its $19,500 highs. The coin fell as low as $16,200 earlier today amid a strong sell-off and a lack of buying support. Some believe this is a result of most U.S. traders and institutions taking the past few days (and next few days) off as a result of the Thanksgiving season.

Some think that the $3,000 drop could be the start of a deeper retracement in the months ahead. Though, according to Willy Woo, the long-term fundamentals of this space remain more bullish than ever, making this a good time to buy.

Referencing the chart below from Glassnode, which shows that Bitcoin’s exchange flows are neutral, Woo wrote:

“Margin longs will be spanked until they go short. Was bullishness was way overheated. Exchange flows are neutral; spot sellers are matched with buyers. Fundamentals a great. The next few weeks? A great time to scoop cheap coins for 2021.”

He added that the recent rally from the $17,000 region to $19,000 was marked by “smaller buyers.” To him, this is a clear sign that the market was starting to become overheated in the short-term as small buyers are often indicative of retail players:

“The last phase of the run to ATH resistance was marked by smaller buyers, a class inrush of noob FOMO. That said, the rate of those new users coming last week was the highest we’ve seen in this bull cycle, right up there with 2017 mania levels.”

Image

Chart of BTC's price action over the past few months with an analysis of on-chain trends from Willy Woo (@Woonomic on Twitter).
Source: BTCUSD from TradingView.com

Not the Only Bull

Other analysts remain bullish despite the ongoing drop.

Referencing how a vast amount of Bitcoin is being bought by retail players using platforms such as PayPal, Dan Morehead, co-CIO of Pantera Capital, recently said:

“When PayPal went live, volume started exploding. The increase in itBit volume implies that within four weeks of going live, PayPal is already buying almost 70% of the new supply of bitcoins. PayPal and Cash App are already buying more than 100% of all newly-issued bitcoins.”

Many think that eventually, buyers will strongly outweigh sellers on any given day. This will result in a strong surge higher over time as there isn’t enough market supply of BTC to meet market demand.

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Bitcoin Fundamentals Remain Great Despite $3,000 Drop From Highs

Source: Bitcoinist News

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Fund Manager: Regulation Rumors Not Likely to Affect Bitcoin in Long Term

  • Yesterday, the chief executive of top Bitcoin exchange Coinbase, Brian Armstrong, revealed that the U.S. Treasury is likely targeting Bitcoin.
  • Armstrong elaborated that he thinks this could have extremely negative effects on the space.
  • Still, Kyle Samani, a managing partner at Multicoin Capital, doesn’t see this as a concern for Bitcoin’s rally.

Coinbase CEO Talks Bitcoin Regulation Rumors

Yesterday, the chief executive of top Bitcoin exchange Coinbase, Brian Armstrong, released a thread alleging impending regulation of the space. He wrote that his company received credible rumors that the U.S. Treasury is in the midst of pushing out a regulation that will require all digital asset exchanges to prove users own the address they want to withdraw to.

“Last week we heard rumors that the U.S. Treasury and Secretary Mnuchin were planning to rush out some new regulation regarding self-hosted crypto wallets before the end of his term. I’m concerned that this would have unintended side effects, and wanted to share those concerns.”

Armstrong elaborated that he thinks this could have extremely negative effects on the space. He specifically highlighted how it could cause a walled garden to form between Bitcoin in the U.S. and Bitcoin abroad:

“Given these barriers, we’re likely to see fewer transactions from crypto financial institutions to self-hosted wallets. This would effectively create a walled garden for crypto financial services in the U.S., cutting us off from innovation happening in the rest of the world.”

Coinbase and a number of other companies and prominent investors in the space joined hands in sending a letter to the Treasury to share their concerns about this potential regulatory measure

Will It Affect BTC?

Bitcoin began to move seriously lower after the tweet from Armstrong was published. While it isn’t clear if the rumor caused selling, the price of the leading cryptocurrency fell from approximately $18,600 as of the time of the tweet to $16,100 early the next morning.

Analysts think that it won’t have a tangible effect on the market in the longer run.

Kyle Samani, a managing partner at Multicoin Capital, says that he doesn’t think that this will have a tangible impact on Bitcoin in the current bull market:

“on the Mnuchin rumors For the current BTC bull market (next 12-36 months), it doesn’t matter Why? Next wave of buyers macro buyers want regulation For them, 21M cap is a feature, and censorship resistance is (kind of) a bug They don’t want self custody. Just inflation hedge”

This was echoed by others in the space, who stated that Bitcoin is much more of an inflation hedge as opposed to a form of money that can bypass all government barriers.

This is somewhat of a controversial opinion due to the large contingent of libertarian investors in the space.

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Fund Manager: Regulation Rumors Likely Not to Affect Bitcoin in Long Term

Source: Bitcoinist News

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Bitcoin Could Face Deeper Correction After Dropping $2,000 From Highs

  • Bitcoin has sustained a strong correction since its $19,600 highs seen earlier today.
  • The coin currently trades for $17,300, down approximately 12% from those highs.
  • Some have suggested the coin could drop lower toward $16,000 in the days ahead.
  • Macro charts show that $16,000 is where Bitcoin may find serious support.

Bitcoin Undergoes Strong Drop From Previous Highs

Bitcoin has sustained a strong correction since its $19,600 highs seen earlier today. The coin currently trades for $17,300, down approximately 12% from those highs.

The leading cryptocurrency could sustain a further drop, some analysts have seemingly suggested.

One prominent analyst shared the chart below amid the drop lower. The chart shows Bitcoin’s price action over the past few months, along with key levels highlighted based on the heat map of volume. As can be seen, there are large “inefficiencies in the charts” where there was a lack of traded volume or consolidation.

According to the chart, there is no substantial bid-side support for Bitcoin until the $16,000 region. While the cryptocurrency already tested that region on some top exchanges (namely Binance) earlier today, it may form consolidation around that region.

Image

Chart of BTC's price action over the past few months with an analysis by crypto trader Bitcoin Jack (@BTC_JackSparrow on Twitter).
Source: BTCUSD from TradingView.com

The trader that shared the chart seen above is the same one that weeks ago predicted that Bitcoin would hit the $18,500-19,500 region when it was trading closer to $13,000. This same trader also predicted in the middle of March 2020 that Bitcoin would see a V-shaped reversal to $10,000 by May or June, which was proven correct basically perfectly.

There is a good likelihood Bitcoin drops toward that region, should we assume the analyst’s views come true yet again.

Expect Drops

While many are fearful after the drop, it’s important to note that drops should be expected in the ever-volatile crypto market.

Bitcoin and traditional market cycle analyst Bob Loukas commented after the drop:

“Most have a short memory. Remember in Jan 2017 just shy of #Bitcoin ATH’s, boom 34% decline. The 2 months later a sharp rally, new ATH’s, and double boom 34% decline. Never a one way street.”

The co-founder of Nexo made a similar comment to Bitcoin, noting that any healthy market does not go up 100% of the time.

It is unclear if Bitcoin will continue its descent lower in the days lower, though many are confident that the bull market is still on.

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Bitcoin Could Face Deeper Correction After Dropping $2,000 From Highs

Source: Bitcoinist News

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Bitcoin Could Run to New Highs as BTC Forms Tweezer Bottom at $19,000

  • Bitcoin has undergone its latest leg higher just recently, pushing to $19,450 on top exchanges.
  • The coin now trades for $19,150 after a slight retracement.
  • Analysts remain bullish as the chart remains bullish: a trader said that the coin just formed a tweezer bottom when it went to test the lows at $18,900.
  • Bitcoin bouncing off that Fibonacci level may suggest that the trend is still in favor of bulls.

Bitcoin Could Move Back Toward the Highs

Bitcoin has undergone its latest leg higher just recently, pushing to $19,450 on top exchanges. The coin has retraced to $19,150 as of this article’s writing, facing a slight drawdown amid some weakness in altcoins and as the buying pressure that was seen the other day abates.

The coin dropped as low as $18,900 a number of hours ago, facing some selling pressure as Ethereum tumbled lower.

Despite this, analysts are still bullish.

Bitcoin just formed a tweezer bottom when it went to test the lows at $18,900. Referencing the chart seen below, a leading crypto trader said, pointing to the tweezer bottom and how Bitcoin held the pivotal Fibonacci level:

“that’s a nice tweezer off the one hour and bounce off the 38.2.”

Bitcoin bouncing off that Fibonacci level may suggest that the trend is still in favor of bulls. The chart also seems to suggest that Bitcoin could soon rocket back towards the local highs at $19,450.

It is still unclear, though, whether or not the cryptocurrency will set new all-time highs before Thanksgiving as some were hoping for. Ethereum-focused prediction market PolyMarket has a market for this outcome, which is currently leaning 88% to “no.”

Image

Chart of BTC's price action over the past day with analysis by crypto trader Big Chonis (BigChonis on Twitter).
Source: BTCUSD from TradingView.com

Other Positive Signs

There are other positive signs that indicate Bitcoin’s trend is still one of growth.

An analyst that is known as TradingShot recently shared the chart seen below, which is showing Bitcoin has somewhat of a fractal with the price of gold.

gold, Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin-Gold correlation since September 2018. Source: BTCUSD on TradingView

This fractal predicts that should the cryptocurrency follow the path of gold, it will soon erupt higher past its all-time high toward $25,000, then may face a strong retracement.

Analysts give credence to this theory because they see Bitcoin as gold 2.0.

This long-term correlation could also give rise to long-term growth in the BTC price as analysts expect gold’s price to increase as inflation does.

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Bitcoin Could Run to New Highs as BTC Forms Tweezer Bottom at $19,000

Source: Bitcoinist News

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Top Industry Fund Managers Think Bitcoin Could Hit $100,000 This Cycle

  • Bitcoin has exploded nearly 100% higher in the past six weeks, rallying from the $11,000 range to $19,200 as of this article’s writing
  • Speaking to the Canadian news outlet Globe and Mail, the CIO of Off the Chain Capital said that he thinks Bitcoin rally 500% from here.
  • That would mean BTC moves to $100,000 in this market cycle, which is a sentiment shared by many.

Bitcoin Could Hit $100,000

Bitcoin has exploded nearly 100% higher in the past six weeks, rallying from the $11,000 range to $19,200 as of this article’s writing. Analysts think that Bitcoin could continue its ascent in the months and years ahead, citing technical and fundamental trends suggesting that strong growth is on the horizon.

Speaking to the Canadian news outlet Globe and Mail, the CIO of Off the Chain Capital said that he thinks Bitcoin rally 500% from here (or to $100,000):

“I have seen BTC go up 10X, 20X, 30X in a year. So going up 5X is not a big deal.”

He said that Bitcoin moving toward the $300,000 region also isn’t out of the realm of possibility in this market cycle.

As to why he thinks this is the case, the investor cited the stock to flow model, popularized by analyst “PlanB”. The model states that Bitcoin’s halvings, which take place every four years, have an extremely positive effect on the price action of the cryptocurrency. The model says that there is a relationship between Bitcoin’s inverse inflation rate (the stock to flow) and the price of the coin.

Bitcoin moving to $300,000 from current levels would be a 1,400% move.

Far From the Only One That Is This Bullish

He is far from the only one that expects Bitcoin to see this sort of growth in the years ahead.

An analyst at Citibank, one of the big firms on Wall Street, recently compiled a Bitcoin report released to institutional clients.

In the report, he stated that he would not be surprised to see the leading cryptocurrency explode to $300,000 in the coming cycle, citing a macro pattern that indicates BTC rallies by a certain amount each market cycle.

The analyst also expanded that he thinks the fundamentals of Bitcoin are stronger than ever. He particularly mentioned the fact that there is such a large amount of money being printed each and every year, which lends him to believe that the government may increase taxes or take drastic action to make up the deficit.

Bitcoin, he suggests, is a way out of all that.

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Macro Analysis Predicts Bitcoin Has Begun Rally Toward $100k

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Analysts Don’t Know What to Think as Bitcoin Whipsaws Between $18k and $19k

  • Bitcoin has seen extreme intraday volatility over the past few days.
  • In the past two days, the coin has traded at both $17,500 and $18,800.
  • Analysts don’t know what exactly to think about this price action.
  • Prominent Bitcoin trader “Jack” recently shared the sentiment that he thinks this market is “wild.”

Bitcoin Undergoes Confusing Price Action Amid Volatility

Bitcoin has seen extreme intraday volatility over the past few days. In the past 48 hours, the leading cryptocurrency has traded at both $17,500 and $18,800 as the market whipsaws between key price levels.

As of this article’s writing, the price of the leading cryptocurrency is sitting at $18,500, though in the past hour, it has been at both $18,400 and $18,700. This extreme volatility comes as the U.S. dollar has begun to move lower once again, boosting Bitcoin, gold, and other harder assets.

Analysts don’t really know what exactly to think about this price action, though.

Prominent Bitcoin trader “Jack” recently shared the sentiment seen below, arguing that he thinks this market is “wild.”

He previously said that he has temporarily gone short on Bitcoin, at least to some extent. He may not be fully short but may be hedging in case the cryptocurrency moves lower in the days ahead.

The trader shared the chart below, which shows that Bitcoin is currently breaking below the parabolic supports that led the rally higher. Parabolic supports breaking in an uptrend are a sign that the rally is in the midst of getting exhausted.

Image

Chart of BTC's price action over the past few months with an analysis by crypto trader "Fiat Jack" (@BTC_JackSparrow on Twitter) 
Source: BTCUSD from TradingView.com

Bulls in Control

Many say that Bitcoin bulls remain in control over the longer run. A senior analyst at Citibank, Tom Fitzpatrick, recently said that the fundamental case for the leading cryptocurrency is still strong despite any

“Bitcoin moves across borders easily and ownership is opaque. That last point is, I believe very relevant. The huge Fiscal deterioration of today has a cost in the future, either directly or indirectly. Directly it is that at some point the ‘bills have to be paid’, which means […] the money needs to be found.”

Dan Tapiero, a prominent macro investor, recently commented on Bitcoin’s outlook from here as well:

“First time I can recall #Bitcoin included in list of macro assets by BoAML blue chip fund mgr survey. Can’t imagine #btc does not outperform all other assets. Fastest horse! It’s so early for btc that it is only NOW being included and that’s AFTER 11yr +250% annualized perf.”

Analysts are optimistic that Bitcoin will continue higher in the longer term, whether or not a correction takes place.

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Analysts Don't Know What to Think as Bitcoin Whipsaws Between $18k and $19k

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Ethereum 2.0 Likely to Happen as Tens of Millions Sent to Deposit Contract

Ethereum 2.0 seems to be confirmed to happen soon as deposits in the contract spike.

Ethereum 2.0 Nears as Deposits Spike

There is now 80% of the ETH needed to launch the upgrade by December 1st, as Etherscan shows. For some more context, there needs to be 524,000 ETH in the contract for the upgrade to take place on the planned launch date.

Large whales and a number of smaller investors have deposited a large amount of funds into the contract as they look to support the upgrade and to make ETH by locking their funds in the contract.

But what happens if the threshold is not reached by the deadline. According to developers, the threshold can be adjusted in the future to ensure that there is not ETH locked in the contract forever. One developer recently said on the matter:

“I personally think that for initial launch, the 100k+ ETH in the contract is sufficient, and that adjusting the threshold down to not leave that ETH in limbo for too long makes sense.”

What is ETH2?

For some more context, here’s some more context about ETH2.

Danny Ryan, a researcher at the Ethereum Foundation, recently said to Paradigm on the update:

“If you haven’t had a chance to read my recent blog post, The State of Eth2, I highly recommend it. I try to give context on the project, discuss the trade-offs, the timelines, and the benefits over time. Specifically, check out the “Benefits of eth2 to the community over time” section. In short, Phase 0 bootstraps the system, Phase 1 provides a highly scalable data-layer that, through the use of eth2 light clients in Ethereum, can be leveraged by layer 2 constructions for scalability, Phase 1.5 is the unification of the Ethereum chain that we know and love as a shard under the upgraded eth2 consensus, and Phase 2+ is expanding the functionality of shards over time.”

Ethereum 2.0 will integrate a technology called sharding, which will split up the processing of transactions amongst different groups of nodes to increase transaction throughput:

“Both of these mechanisms are designed to enhance the system while retaining strong properties of decentralization. You can easily scale up a block chain through simpler mechanisms than sharding, but these mechanisms tend to reduce the ability for users to follow and participate in consensus with consumer hardware. Proof of Stake and Sharding, though, allow for a wide set of participants to contribute to the construction of a highly scalable protocol even with standard consumer hardware.”

Analysts expect the integration of Ethereum 2.0 to result in a rally in the price of ETH over time.

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Ethereum 2.0 Likely to Happen as Tens of Millions Sent to Deposit Contract

Source: Bitcoinist News

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Bitcoin May Face Some Short-Term Selling Pressure as Coinbase Whales Deposit

  • Bitcoin has undergone some shaky price action after a push to $19,000 this past week.
  • Ki Young Ju, CEO of Crypto Quant, recently said that the coin could face a correction in the days and weeks ahead.
  • The percentage of whale deposits relative to retail deposits into Coinbase addresses has increased, he noted.

Bitcoin Could See Price Drop As Whale Deposit Ratio Spikes

Bitcoin has undergone some shaky price action after a push to $19,000 this past week. The coin currently trades for $18,200, $800 below the local highs (and year-to-date highs) and around $700 above the local lows near $17,500.

Analysts are fearful the cryptocurrency could retrace as on-chain trends suggest that there is some selling taking place.

Ki Young Ju, the CEO of crypto data platform Crypto Quant, recently noted that the cryptocurrency could face a correction amid an increase in whale deposits to exchanges. He noted that per his data, the percentage of whale deposits into Coinbase addresses has increased, suggesting there are big holders looking to sell:

“Too many $BTC whales on #Coinbase. I’m still long-term bullish, but we might face some corrections or sideways until whales become inactive on spot exchanges. *Exchange Whale Ratio is the relative size of the top 10 inflows to total inflows. Historical data for #Coinbase Whale Ratio. When whales are active(over 90%) on Coinbase, the $BTC price will likely be going sideways or bearish.”

According to Willy Woo, another on-chain analyst who picked up on this trend, this selling may not be a big concern. Commenting on how sales by old/large Bitcoin holders might not be bearish per se, he recently wrote:

“It used to be that peaks in destruction or dormancy would be a bad sign for the market as old Bitcoins have more experienced masters, thus smarter money; this would predict a price drop. These days not always, OG whales also sell bottoms. Smarter money has arrived. Post this now as while there’s so much FOMO and strong fundamentals being blasted out, there’s also signs of the market being overheated locally. I’d be very surprised if we break all-time-high on the first try without a rejection, or consolidation, before a second run at it.” 

Not the Only Cause for Concern

This isn’t the only cause for concern for Bitcoin bulls.

The funding rates of top Bitcoin futures markets are currently in the midst of spiking higher despite Bitcoin actually falling. This suggests that there are many derivatives traders that are looking to long the dip.

Analysts are fearful that this could result in a correction for this market. The issue is that overleveraged longs can easily sell their positions in tandems, leading to rapid corrections lower often when the funding rate is high.

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Bitcoin May Face Some Short-Term Selling Pressure as Coinbase Whales Deposit

Source: Bitcoinist News