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The price of Bitcoin (BTC) broke above $ 17,400 in a strong intraday rally. On Coinbase, BTC even got close to $ 17,700, setting a new two-year high. As BTC slides through the multi-year resistance above $ 17,000, analysts are divided on its near-term outlook. Some say BTC is ready for a withdrawal as whale deposits begin to rise. Others believe that there is little resistance up to $ 20,000 and that an all-time high is likely before the next deep correction.
Bitcoin’s momentum over the past month has been particularly impressive for two key reasons. Firstly, during previous bullish cycles, such as longtime trader Peter Brandt explained, BTC saw up to nine fixes. But in the ongoing rally, BTC only saw two 10% corrections. Second, Bitcoin has steadily recovered from areas where corrections were expected, such as November 16 when it hit $ 14,774 on Binance.
However, withdrawal requests are also increasing as market sentiment around Bitcoin heats up. Speaking with Cointelegraph, Ki Young Ju, CEO of crypto data provider CryptoQuant, said the Exchange Whale Ratio indicates whale deposits in exchanges are on the rise. In the short term, this could put selling pressure on BTC. Traders also say that BTC’s current highs near $ 20,000 may be early, leading to a correction before the level is reached.
A little bitcoin pullback?
When Bitcoin whales deposit BTC in exchanges, the trend typically shows an intention to sell from investors with high net worth. According to CryptoQuant’s Tokens Transferred and Exchange Whale Ratio metric, deposits of whales and general investors are starting to increase. This means that more investors are shifting to exchanges to profit from their BTC holdings. Ki said:
“The tokens transferred (not regulated by the entity) on the Bitcoin network are increasing, indicating that whale wallets are moving their funds. And the fund flow ratio for all exchanges is decreasing, which means that the exchanges are not. they evoked these great transactions. […] I think huge OTC deals are still going on. This is one of the main reasons I’m still long-term on Bitcoin. “
The Exchange Whale Ratio is also hovering at a level that has historically led to a steep drop in prices. Ki said the ratio has hovered above 85% for the past few days, which puts Bitcoin in a risky position for a potential correction. As there is virtually no resistance between $ 18,000 and the peak of $ 20,000, it would be reasonable to expect whales to profit at around $ 17,000.
Whales seek liquidity for both buy and sell orders because they are dealing with larger volumes. Selling when the price of BTC is rising is ideal for whales as it limits potential downside volatility. Hence, there is a strong chance that whales will try to sell between $ 17,000 and $ 18,000 as a last stop before seeing a new all-time high. As Ki added:
“Looking at ‘Exchange Whale Ratio (72h MA)’, the price of BTC is likely to undergo minor corrections. […] When this is below 85%, the chances of the price continuing to rise are high. Between 85% and 90% indicates a correction and over 90% suggests that a sharp drop in price may occur. We have some risk of correction as this value has recently exceeded 85% “.
Some pseudonymous traders have even predicted that BTC will see a short-term high before hitting a new high. In the medium term, even though BTC’s momentum is strong, a trader known as “SalsaTekila” She said a retest of lower BTC support is expected. It identified $ 12,000 as the potential area where the next deep correction could lead. Considering the historical cycles of Bitcoin, the trader also said that a six month correction would not be unusual.
A continuous rise until the end of the year
On top of Bitcoin’s favorable technical structure, the notable increase in daily volume in the cryptocurrency market supports the bull’s argument. On November 17, Binance CEO Changpeng Zhao She said the exchange has seen an all-time high system load, which indicates that the demand for cryptocurrency trading is on the rise.
Similarly, Arcane Research found that Bitcoin’s spot volume has increased by 270% in the past month. The clear increase in the volume of the cryptocurrency market in general shows that real demand is behind the ongoing bull run. Arcane Research’s weekly report reads:
“The daily volume on Thursday of last week was the highest since the brutal incident in March and the volume has remained high in recent days as well. This has pushed the 7-day average to new highs this week. increased by over 270% in the last month “.
However, despite all of the aforementioned positives, the mainstream is not involved in the ongoing rally. Google Trends shows that the popularity of the keyword “Bitcoin” is only 16% of what it was during the peak of 2017. A recent Bloomberg report calls the recent uptrend a rally “nobody talks about”. These trends show that Bitcoin has significant growth margins through the end of the year.
But Matt Maley, an investor at Miller Tabak + Co. who acknowledges the high institutional demand around Bitcoin, said individuals will return remains uncertain, as those who “burned badly” in 2017 are likely “less enthusiastic” about BTC now. The way this would change is if Bitcoin breaks its record high of $ 20,000 and FOMO – fear of getting lost – around BTC returns. Hence, there is a high probability that if BTC hits a new all-time high, a broader rally could emerge.
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