After the price of Bitcoin (BTC) suddenly fell from $ 18,500 to $ 17,200, some traders began to question whether a local peak had formed, but there are several factors that indicate that the trend remains unchanged.
Since the first downturn, BTC has consistently shown extreme volatility, indicating market uncertainty.
Four factors that show that Bitcoin is still strong are the influx of whales, strong market reaction, resistance to each group of whales and strong open interest.
Whales do not sell bitcoins in large quantities
According to CryptoQuant, whales do not sell large amounts of BTC. This trend is remarkable as Bitcoin is testing a heavy multi-year resistance level of $ 18,000.
Bitcoin exchange whale conditions. Source: CryptoQuant
CryptoQuant chief Ki Yong Joo said the proportion of whale exchanges remains low. Given the relatively low pressure from the whales, Joe said:
Dear Dollar BTC Hotkeys! You can call me Moon Boy, but unfortunately there will be no mass dumping like in March this year. The whale price (90-day moving average) is still very low. A long ascent is inevitable. ”
If the sales pressure from whalers remains low in the short term, BTC may have enough firepower to start a broader meeting.
Bitcoin remains resilient to large groups of whales
Whalemap, a market analysis company that tracks whales, has found a similar trend. The whales collected BTC in November, analysts said. Enter the prices the whales bought BTC at.
In the short term, support for the main Bitcoin whale group will be $ 16,411. As long as BTC remains stable above the $ 16,400 support range, the trend is likely to continue.
A group of whales is formed when whales buy bitcoins at a certain price level and do not transfer them elsewhere. Analysts explained:
Bubbles refer to the prices that bitcoin whales currently have. Bubbles also visualize support levels. Last time we jumped $ 15,762 and increased the price by 15%. Will the new $ 16,411 bubble last this time as well? ”
Bitcoin whale groups. Source: Whale map
Strong market reaction after a sharp fall
Combined with favorable whale data showing Bitcoin’s resilience, every major drawdown has been quickly bought in the last 24 hours.
The Bitcoin price fell to $ 17,215 and $ 17,284 on November 18, well below the top of $ 18,520. However, BTC recovers almost immediately after each minor correction, settling in most cases over $ 17,600.
Open interest is increasing
Skewed data show that open interest in the bitcoin futures market is increasing. Open interest in the futures market shows the sum of all long and short contracts.
Usually, a higher open interest rate means that a large number of traders speculate in the bitcoin price.
In the short term, this means that significant price movements are inevitable. It remains to be seen whether the high volatility will push Bitcoin higher or a deep correction.
However, based on the optimistic whale data and the strong market reaction to the big drops, the chance of a sudden increase in volatility in Bitcoin’s favor is higher.