The crypto community is buzzing with excitement following Bitcoin’s latest surge towards significant resistance levels. Although this movement has instilled a sense of optimism, many investors are reacting negatively towards BTC, as they continue to wager on a prolonged downturn, painting a bearish picture for the asset.
Increase in Whale Shorting Activity
As Bitcoin struggles to breach key resistance levels, there has been a concerning trend among major investors, commonly referred to as whales. Alphractal, a sophisticated investment and on-chain data platform, indicates a growing sense of pessimism among these investors as they anticipate the continuation of the current correction.
Recently, BTC experienced a brief spike to the $87,000 mark amid rising volatility in the wider crypto sector. However, this upward movement encountered substantial resistance as whale holders quickly opened substantial short positions following the upswing. “Whales Enter Short Positions on Bitcoin as Leverage Increases,” the platform noted.
In spite of the temporary rise to $87,000, these large investors opted to liquidate their long positions and increase their short bets. Given the current market volatility, this shift raises questions about BTC’s short-term outlook.
The involvement of whales often impacts price trends, which may lead to Bitcoin continuing its decline in the coming weeks. However, if buying pressure strengthens at essential support levels and establishes a robust defense, BTC might see an upward movement.
Moreover, Alphractal highlights an increase in market leverage. After analyzing the Bitcoin Aggregated Open Interest/Market Cap Ratio, the platform noted that this metric is on the rise again, indicating heightened leverage. According to their findings, this surge in market leverage might trigger a new wave of volatility, potentially leading to further mass liquidations.
On-chain analytics have also revealed significant selling pressure among large Bitcoin investors, raising alarms regarding possible downside risks. Leading market intelligence and data analytics platform IntoTheBlock illustrates a decline in whale balances as the market fluctuates.
Reviewing the charts, it appears that BTC whales have been on a downward trend for nearly a year. However, recent data from March suggests a potential shift, as whales now possess approximately 62,000 more BTC than at the start of the month, indicating renewed accumulation.
BTC’s Price Within Key Chart Formation
This new accumulation by BTC whales enhances the possibility of a price reversal from the ongoing downtrend. Such a reversal could be part of a broader trend, as Captain Faibik, a crypto analyst and investor, anticipates a potential surge towards its prior all-time high. His forecast is backed by a specific chart pattern, notably the Falling Wedge formation.
Captain Faibik foresees that BTC may consolidate within this significant pattern for the next 10 to 15 days before executing a considerable bullish breakout. Upon this breakout, Bitcoin’s price could substantially rally to the $109,000 level, reigniting the bull market.
Image credits: Unsplash, chart from Tradingview.com
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