The bitcoin (BTC) price appears to be relatively stable at around $ 16,000, well above both safe and risky assets, including gold and stocks. But in the short term, digital assets face a major hurdle in the form of whales.

On November 12, the Bitcoin price hit $ 16,199, a level not seen since the famous 2017 rally. Although BTC fell to $ 15,600 in a matter of hours, it has rebounded quickly and, at the time of writing, it looks like the digital asset will try. Exceeded the highest level for the day.

Bitcoin has shown resilience above $ 16,000, which has historically been a key turning point. As BTC crossed this important territory, market sentiment for higher cryptocurrencies became very optimistic.

However, this could make the cryptocurrency and the market as a whole vulnerable to whale sales. Wealthy people with a lot of BTC, called whales, prefer to sell when liquidity is high.

In most cases, these are periods of the greatest liquidity when the price of BTC rises with great optimism in the market.

Chain data suggests large whale-driven sale likely related to BTC
Whales have more BTC than usual and have seen an increase in their occurrence on major stock exchanges.

These two data points show that the likelihood of large whale-related sales is high in the short term.

When the Exchange Whale Ratio exceeds 85%, it indicates that an adjustment is possible. CryptoQuant CEO Ki Yong Joo explained that 85% is the recovery rate and 90 is the dumping rate for the index.

With a whale exchange rate of about 85%, Key said a “massive discharge” is unlikely, but minor adjustments are possible.

This data is consistent with the Sentiment report, which showed that the number of large bitcoin whales has reached record levels.

Santiment analysts suggested that the number of whale bitcoin addresses from over 10,000 BTC to 111 is a confirmation of the whales’ trust.

While this is true, it also means that the bitcoin market currently contains the most extraordinary number of whales. Hence, if the whales start making money, it could lead to a recession for the foreseeable future. Santiment analysts wrote:

Do you want to confirm that Bitcoin whales are sure of their origin? The number of addresses containing at least 10,000 BTC could correspond to a maximum of 111 for 2020. In addition, addresses containing 1,000 – 9,999 BTC are now less than the ATH of 2,135 wallets.
The future is less bright for everything
Alternative cryptocurrencies (altcoins) are now in a precarious position due to the current bitcoin price cycle.

If Bitcoin rises, it will continue to siphon volumes from the cryptocurrency market. Hence, alternative digital currencies will be worse than Bitcoin and possibly the US dollar.

Alternatively, if Bitcoin crashes, it could disrupt the market, which could lead to a major correction in the altcoin market. A pseudo-cryptocurrency derivatives trader known as CoinMamba wrote:

“I will far from yearn for any alternative here. If BTC breaks, it will fall very hard. Once they start moving, you have plenty of time to make a good contribution. So be patient, my friends … “.

Source: CoinTelegraph