Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
Bitcoin bulls should brace for an impact from traders holding larger quantities of the cryptocurrency tokens, warns Robbie Liu.
In his Friday note, the OKEx investment analyst said that the so-called âwhalesâ may take advantage to dump Bitcoin as it trades inside the $19,500-20,000 range. He noted that the area has become too difficult to break, adding that the next sessions would see âa battle between the whales and retail tradersâ as Bitcoin tries to reach $20,000.
The Retail Tradersâ Dilemma
The statements appeared as a part of a broader analysis that studied Bitcoin Futuresâ metrics against the cryptocurrencyâs rally above $19,900 in the spot market on Tuesday. Mr. Liu highlighted that retail traders faced extreme losses after chasing both the Bitcoin price gains and losses.
For instance, the long/short ratio on OKEx plunged from 1.08 to as low as 0.78 between late last weekend and Monday. It was the same period wherein the BTC/USD exchange rate rallied higher. That showed that retail traders anticipated an extended bearish correction in the spot market. But on Tuesday, Bitcoin established an all-time high.
With their overleveraged short positions liquidated, retail traders shifted their strategy from bearish to bullish, this time anticipating that BTC/USD would hit $20,000, a key psychological resistance level. But the pair fell short of touching the intended long target and reversed direction. That again put traders on the wrong side of the trade.
âThe subsequent $1,800 pullback may have also caused these traders to be caught out of position,â noted Mr. Liu.
The analyst added that retail traders now donât have a clue about the next Bitcoin price direction. A high selling activity inside the $19,500-20,000 range limits their long exposure, while an equally assertive buying sentiment between $18,000-18,500 reduces their short opportunities.
Bitcoin Whales to Overtake
The retail tradersâ indecisiveness allows whales to take the driverâs seat. And according to data fetched by analytics platform CryptoQuant, the rich traders are looking to dump Bitcoin as its price eyes a rally towards $20,000 in the short-term.
Ki-Young Ju, the CEO of CryptoQuant, tweeted Thursday that Bitcoin inflow across all exchanges is going upward, pointing to an increase in whalesâ deposits. That typically leads to sell-offs.
âIf you look at all exchanges inflow mean(144-block MA), it hit over 2 BTC a few hours ago,â stated Mr. Ju. âWe hit 2.5 BTC when the price was tapping $20k. It was the eight-month high since the March great sell-off.â
Bitcoin was trading at $18,962 as of this press time.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.