Bitcoin [BTC] is currently in a period of consolidation, with its price hovering around the $67k mark. At the same time, large players in the market have decided to capitalize on their gains. Will this impact BTC’s price negatively in the near future?
Significant Activity from Bitcoin Whales
Renowned crypto analyst, Ali, recently drew attention to an intriguing development. He mentioned in a tweet that Bitcoin whales had recently cashed out profits exceeding $1.4 billion. This was evident from the substantial increase in the realized profit of BTC’s long-term holder whales in USD.
Earlier, CryptoCrypto also noted a surge in BTC whale transactions. The number of BTC whales has been rising as they continue to accumulate, reaching close to the 4 million milestone and matching the levels seen in 2021.
A follow-up analysis sought to gauge market sentiment following the spike in whale activity. Santiment’s data indicated a significant increase in BTC’s exchange outflow on October 20, 2024. Consequently, BTC’s supply on exchanges decreased while the off-exchange supply surged. These metrics collectively signaled a strong buying pressure on Bitcoin, typically a prelude to price appreciation.
Anticipating Bitcoin’s Volatility
Against this backdrop, BTC’s price remained relatively stable, displaying minimal fluctuations over the past week and trading slightly above $67k at present.
To ascertain if the mounting buying pressure would drive BTC’s price higher, CryptoCrypto analyzed CryptoQuant’s data. The analysis revealed that BTC’s aSORP turned negative, suggesting an uptick in profit-taking by investors. Such behavior in the midst of a bull market could point to a potential market peak.
An additional bearish signal came from the NULP metric, indicating that investors were sitting on substantial unrealized profits and exhibiting signs of overconfidence.
Furthermore, Bitcoin’s long/short ratio experienced a notable decline, signaling a prevalence of short positions over long positions in the market, reflective of growing bearish sentiment towards the asset.
On examining the daily chart, it was observed that BTC successfully tested its support at the 20-day SMA based on the Bollinger Bands analysis. Correspondingly, the technical indicators hinted at elevated price volatility for BTC, potentially approaching a resistance level at $68.5k in the event of an upward price movement.