Bitcoin Prices Experience Volatility Amid Whale Activity

Key Points:

• Increased whale activity on Binance and profit-taking by long-term holders may result in greater sales pressure and market volatility.

• Bitcoin’s price might drop to fill the CME gap below $115,000.

Bitcoin (BTC) started the week at a record high, but by Tuesday it had declined 5%, landing at $116,850. After reaching $120,000, it faced selling pressure, a critical juncture for traders moving forward.

At the time of writing, Bitcoin was trading below the 20-period Simple Moving Average (SMA) on a 4-hour chart, indicating the potential for further declines if it trades close to key levels.

Profit-Taking Influences Price Downturn

Market volatility around Bitcoin has recently intensified due to increased activity from whales on Binance, as analyzed by Cryptoquant. Specifically, Binan Sukjira’s activity score rose significantly after Bitcoin hit its all-time high of $122,000.

This score measures the actions of large Bitcoin holders on Binance, the largest exchange globally. A high score denotes considerable trading activity from these whales.

On Monday, whales deposited around 1,800 BTC on Binance; these large inflows represented over 35% of total Bitcoin inflow worth more than $1 million. “This indicates that major players are strategically placing assets on the most liquid platforms,” noted analyst CrazzyBlock.

This uptick in deposits suggests that large investors may be looking to secure profits after reaching $122,000 or leveraging Binance’s liquidity to establish new positions amid significant market fluctuations.

“The presence of increased ‘sellside’ pressure at major trading platforms raises the risk of sudden price swings.”

Meanwhile, André Dragosch, European Research Director at Bitwise, noted a considerable rise in profit-taking by long-term holders, which may be contributing to current market corrections.

The scale of profits, nearing 98%, often signals the potential for a significant price adjustment.

Possible Price Correction Identified

The recent Bitcoin rally has created a CME futures gap between $114,380 and $115,630. This gap is typically “filled” as traders seek these levels as points of support or resistance based on market conditions.

If past trends hold, Bitcoin’s price could eventually fall to fill this CME gap near $114,400. “It’s likely that Bitcoin will fill the CME gap during the CPI release and continue its climb afterward,” said analyst Mikybull Crypto in a recent post.

However, Michael Van de Poppe from MN Capital pointed out the possibility of an even larger correction down to $108,000.

“As long as it’s above $100,000, the trend remains upward. The bull market is indeed here.”

“Volatility is certainly on the horizon. Ideal for those who trade such swings. Is there a reason to be concerned? Not really. Once Bitcoin surpasses $108,000, the bullish trend appears solid.”

This article does not include investment advice or recommendations. All investment activities carry risks, and readers should conduct their own research before making decisions.