Bitcoin (BTC) kicked off the new year on a positive note, reaching a peak of $102,000 on January 7th. However, this initial surge was short-lived, as the cryptocurrency soon experienced significant corrections, dropping below the $100k mark shortly after.
Currently, Bitcoin is trading at $96,556, showing a partial rebound from a recent low of $89,000 earlier this week. The dip below $90,000 raised concerns among investors, prompting analysts to investigate the underlying reasons for this volatility.
One CryptoQuant analyst highlighted the occurrence of “stop hunting” patterns, where prices briefly breach crucial support levels before bouncing back. This trend has led to questions about Bitcoin’s ability to reverse its course without the influence of major market players.
Impact of Whale Activity and Market Sentiment
Analysis from CryptoQuant points to a lack of significant activity from whales as a key factor contributing to Bitcoin’s limited recovery. The Coinbase Premium Gap (CPG) data revealed substantial selling pressure from whale entities, without corresponding buying pressure to offset the decline.
Typically, when whales intervene by buying Bitcoin during a downturn, it leads to increased market volatility. However, during the recent price movement, this expected behavior was absent.
The analyst emphasized the importance of monitoring activity on major exchanges like Binance, where whale transactions often leave a noticeable mark on market dynamics.
Despite indications in the daily candle patterns suggesting a potential trend reversal, the absence of active participation by significant players has cast uncertainty on Bitcoin’s short-term trajectory.
Bitcoin’s Metrics Signal Mixed Trends
Besides whale activity, other metrics related to Bitcoin offer additional insights into its performance.
For instance, Open Interest, which measures the total outstanding derivative contracts, witnessed a 2.09% increase in the last 24 hours, totaling $61.88 billion. This rise in Open Interest suggests a growing interest in trading activity and potentially more speculation regarding Bitcoin’s future price movements.
Moreover, the volume of Open Interest surged by 213.18% during the same period, indicating increased market participation.
Meanwhile, data from IntoTheBlock highlighted fluctuations in whale transactions, classified as transfers exceeding $100,000. The number of these transactions decreased from 26,000 on December 16 to 15,000 by January 12.
However, there has been a recent uptick, with over 20,000 transactions recorded on January 13. This renewed activity among whales indicates a resurging interest in Bitcoin from large investors, which could potentially impact market dynamics in the upcoming weeks.