Thursday , February 2 2023

Bitcoin price has soared to $17.5K, but not everyone agrees that the rally is sustainable.


The price of Bitcoin (BTC) exceeded $17,400 in a strong intraday rally. On Coinbase, BTC reached a high of $17,700 in two years. As BTC passes multi-year resistance of over $17,000, analysts split into a short-term outlook. Some say BTC is ready to be withdrawn as whale deposits begin to grow. Others have little resistance up to $20,000, and I think it’s likely to be an all-time high before the next deep adjustment.

Bitcoin’s momentum last month was particularly impressive for two main reasons. First, long-term trader Peter Brandt during the previous bull cycle Explanation, BTC saw up to 9 modifications. However, in the ongoing rally, BTC saw only two 10% corrections. Secondly, Bitcoin continued to recover in areas where corrections were expected, such as when it reached $14,774 on Binance on November 16th.

However, as the market sentiment over bitcoin is heating up, requests for withdrawal are also increasing. In an interview with Cointelegraph, CryptoQuant’s CEO Ki Young Ju said the Exchange Whale Ratio meant that whale deposits on exchanges were on the rise. In the short term, this could put selling pressure on BTC. Traders also say that BTC’s current high near $20,000 could be a front run and lead to a correction before reaching the level.

Minor bitcoin withdrawal?

When bitcoin whales deposit BTC on an exchange, this trend generally shows an intention to sell from investors with high net worth. According to CryptoQuant’s Tokens Transferred metric and Exchange Whale Ratio, deposits from whales and ordinary investors are starting to increase. This means more investors are moving to the exchanges to get a profit on their BTC holdings. Ki said:

“There is an increasing number of (non-entity-adjusted) tokens sent on the bitcoin network, indicating that the whale wallet is moving funds. And the rate of money flow to all exchanges is decreasing. This means that the exchange has not triggered such a large deal. […] I think a large OTC transaction is still going on. This is one of the main reasons I still use bitcoin for a long time.”

The Exchange Whale Ratio is also at a level that has historically caused a significant price decline. Ki said the rate has exceeded 85% over the past few days, putting bitcoin in a dangerous position for potential corrections. There is virtually no resistance between the $18,000 to $20,000 peak, so it makes sense to expect whales to make a profit at around $17,000.

Because whales process large volumes, they seek liquidity for both buy and sell orders. Selling when BTC price goes up is ideal for whales as it limits potential downside volatility. So it’s likely that the whales will sell between $17,000 and $18,000 as a last stop before seeing a new all-time high. Ki added:

“Looking at the’Whale Exchange Rate (72h MA)’, BTC price is likely to face some adjustments. […] If it is lower than 85%, the price will likely continue to rise. Between 85% and 90% indicate an adjustment, and above 90% indicate that the price could fall significantly. There is a risk of some modification as these values ​​have recently exceeded 85%. “

Some anonymous traders predicted that BTC will be the best in the short term before hitting a new record. Trader known as “SalsaTekila” despite strong BTC momentum in the medium term said A retest of low BTC support is expected. He pointed to $12,000 as a potential area that could lead to the next deep adjustment. Given Bitcoin’s historical cycle, traders also said that a six-month adjustment would not be uncommon.

The upward trend continues until the end of the year

A noticeable surge in the daily trading volume of the cryptocurrency market on top of bitcoin’s advantageous technological structure fuels the bull’s case. On November 17th, Binance CEO Changpeng Zhao said Exchanges have always had a high system load, which indicates a surge in demand for cryptocurrency trading.

Arcane Research found that Bitcoin spot trading volume increased by 270% over the past month. In general, a clear increase in the size of the cryptocurrency market shows that there is real demand behind the continued bullish. Arcane Research weekly reports include:

“The daily trading volume last Thursday was the highest since the brutal crash in March and has remained high over the past few days. This caused the 7-day average to hit the highest this week. Bitcoin trading volume has increased by more than 270% over the past month.”

However, despite all the positive factors mentioned above, the mainstream is not involved in the ongoing rally. According to Google Trends, the popularity of the keyword’bitcoin’ is only 16% compared to its peak in 2017. A recent Bloomberg report calls the recent uptrend a “nobody tells” rally. This trend shows that Bitcoin has room for growth through the end of the year.

However, Matt Maley, an investor at Miller Tabak + Co., who is aware of the high institutional demand for bitcoin, said it remains uncertain whether individuals will return. The way this changes is when Bitcoin breaks its all-time high to $20,000 and the FOMO (fear of missing) exceeds the BTC yield. So, if BTC hits an all-time high, a wider rally is likely.