According to analysts at Material Indicators, a crypto analysis firm, mega-whales sold off strongly when Bitcoin hit $ 40,000 on January 7. This led to a rapid 10% drop to the $ 36,000 area over the next few hours.
The drop was quickly redeemed, eventually pushing the price above $ 41,000 within 12 hours. However, BTC saw another big drop after setting another all-time high at $ 42,000, and at the time of writing, the top-ranked digital asset is trading at $ 40,800. According to the material indicators:
“So it looks like the mega whales started selling after that dump around 2 am UTC, and kept selling on spikes. I guess they expected more inconvenience. They did not really participate in the rally up to 42 km, which would further consolidate this point.
During the latest pullback from $ 42,000 to $ 40,000, Material Indicators analysts explained that the smaller whales, which hold $ 100,000 to $ 1 million, began to turn a profit. They noted:
“However, now they’ve started buying again. Presumably to break the 42k resistance. Only this time, it seems that it was the normal whales (class $ 100,000 – $ 1M) that started to turn a profit. “
Given that sometimes over the past week the price of Bitcoin has traded higher on Coinbase, it is clear that there is a strong demand from buyers from the United States.
This suggests that there is a battle between normal whales taking profits and new buyers in the US market. Net rejections from each new all-time high also indicate that whales could turn aggressive profits as soon as Bitcoin hits a new high.
As such, it is important that the demand for Bitcoin from the United States is sustained in the short term. Otherwise, the high level of whale selling pressure could cause BTC to see a correction for the foreseeable future.
Where could Bitcoin go from here?
Bitcoin currently has extremely strong technical momentum which continues to drive the price higher. Because of this, traders are reluctant to sell short, but some have started to take profits.
In the short term, a concern for Bitcoin is the potential recovery of the US dollar. A pseudonymous trader known as “Cantering Clark” highlighted the rebound in the US dollar and the decline in precious metals. he he told me:
“So the question is, with the $ DXY surprisingly bottoming and the metals responding by being bombarded, is the $ BTC holding up?”
The US Dollar Index (DXY) hovers at a support level on the monthly chart. Alternative stores of value, like Bitcoin and gold, are priced against the dollar. Therefore, if the dollar starts to rise, the risk of a BTC correction could intensify.