The broader cryptocurrency market is currently witnessing a downturn, with Bitcoin (BTC) at the forefront of this downward trajectory. While it reached a peak of $66k in late September, its current value hovers just above $60k.
According to data from Hyblock Capital, Bitcoin’s market equilibrium is somewhat disturbed, hinting at a possible correction, especially as we enter the final quarter of 2024.
This extreme behavior by investors offers insights into potential market inflection points. Whenever there is an excess of long or short positions, it indicates a disruption in market equilibrium.
Understanding market equilibrium is crucial as an abundance of long or short positions often signifies impending corrections or shifts in trends.
Many traders had anticipated a bullish trend, but current dynamics are altering market sentiment towards a different direction.
Bitcoin’s Short-Term Supply from Holders
If short-term investors were to decrease their supply by 80,000 BTC, it could lay the foundation for a new bullish trend. This diminishment would aid in stabilizing the market, facilitating Bitcoin’s recovery.
In recent weeks, there has been a surge in supply inundating exchanges, exerting downward pressure on Bitcoin’s pricing. Presently, Bitcoin’s activity is trading below the 365-day SMA, reinforcing a pessimistic view.
With supply on the rise and demand on the decline, it is likely that BTC’s price will continue its descent, signaling an imminent correction.
Interest in Active Digital Currencies
Concurrently, the interest in active digital currencies has plateaued since the close of 2021. This lack of growth could indicate waning enthusiasm for launching new ventures.
Several factors could contribute to this trend, such as market fragility and regulatory constraints. This scenario further suggests that Bitcoin might be on the verge of a chart correction soon.
Global Unrest Impacting Prices
Ongoing geopolitical tensions, particularly the Iran-Israel conflict, are also impacting cryptocurrency prices. Historical data indicates that during real-world conflicts, Bitcoin’s prices typically experience initial dips, followed by recoveries.
For instance, in October 2023, Bitcoin witnessed a 5% decline in the first four days, only to rebound by 12% over the subsequent nine days.
Similarly, during the Ukraine-Russia conflict in February 2022, BTC plummeted by 10% on day one but surged by 27% in the ensuing six days.
Given these patterns, it seems that Bitcoin is currently in a corrective phase before a potential rally in the final quarter. However, can the untouched whales help BTC maintain its foothold above the $60k mark at present?
Whale Activity in BTC
Despite the current market volatility, both new and established whales remain unperturbed. Movements in the Futures market are part of a broader strategy, wherein tangible market shifts occur through spot trading and over-the-counter (OTC) markets, as highlighted by Ki Young Ju on X.
The inflow of Bitcoin into custody wallets indicates a rise in permanent holders’ positions, backing a bullish long-term outlook for Bitcoin.
According to CryptoQuant data, older whale holders are seeing modest returns while newer whales are actively accumulating Bitcoin.
This accumulation might help in sustaining BTC above the $60k level. Nevertheless, it is essential to acknowledge the uncertain nature of crypto markets.