Bitcoin went into the weekend on a strong note, taking out $11,000 and holding above it. But after the cryptocurrency made an attempt at $11,200 a rejection has the asset’s price back to $10,500 where its now at risk of a steeper correction.
Blockchain data shows that the weekend crash could have been driven by whales offloading their BTC. But why did the flow of “whale” funds suddenly get so “intense” and what does this say about how deep the correction goes?
Live From Saturday Night! Weekend Bitcoin Price Pump Rejected
The leading cryptocurrency by market cap appeared primed to pump all through the weekend, but halfway through came to a halt. On Saturday, Bitcoin price set a peak high of $11,180 on crypto exchange Coinbase before a sharp reversal.
The rejection from the high sent the crypto asset’s price momentum downward, breaking down through the bottom trend line support of a rising wedge chart pattern.
BTCUSD Ascending Wedge Confirms Head and Shoulders S:R Flip | Source: TradingView
Ascending wedges are typically bearish reversal patterns. The rising and narrowing structure tricks market participants into believing an asset’s price is going up, only to later be dumped on and stop losses taken out that have accumulated on the way up.
Related Reading | Bitcoin Bouncing From Bull Market Support Points To 2021 As The Year Of Crypto
The combination of new sellers and buyers having stops triggered at a loss results in a more violent fall. However, there could also be something else that has added to the severity of the over $700 drop in 48 hours.
100+ BTC Whale Wallets Flow To Exchanges | Source: glassnode
Crypto Whales Watching Results In Intense Behavior Observed
According to glassnode data spotted by a sharp-eyed crypto analyst, the flow of BTC coming from “whales” increased rapidly ahead of the selloff.
These Bitcoin whales all have a balance of 100 BTC or more, or roughly the equivalent of a cool million as of this writing. The wallets containing this amount of Bitcoin or higher suddenly exhibited some “intense” behavior according to the analyst.
Fully transparent blockchain data also confirms that this Bitcoin was sent directly to cryptocurrency exchanges, and not just from one wallet to another.
But what’s the reason for the sudden switch? Previously, whales had been observed moving Bitcoin off of exchanges to hold for the long haul.
Related Reading | US Stock Indices Dow Jones, SPX Tank, Taking Down Bitcoin In Tandem
Recently, however, mining pools and other larger entities are back to pushing Bitcoin to exchanges, but why?
The mood is suddenly shifting in the market once again, from irrational exuberance to fear, uncertainty, and doubt. Profits have been made, and soon assets could be sold off to secure those paper gains if things start falling harder.
The US election and several other key factors hanging over markets make for a fearful future for the rest of the year. But does that mean it is time to be greedy, and those who buy the coming blood will be rewarded when its all over? Or is the blood bath about to get so bad, that not even Bitcoin is safe for what’s to come?
Featured image from DepositPhotos, Charts from TradingView and Glassnode