The Bitcoin Price Index has posted a price decrease during the last 36 hours. The combined price index for the crypto fell from a multi-year high of $19,400 to $16,800 at press time during this time. The move was expected in some quarters but further price decline may be expected as big Bitcoin holders aka whales are still depositing their Bitcoin in exchanges and that could lead to a further drop.
The Whale Movements
Whales are large Bitcoin holders and they are very influential in determining the short-term price of the cryptocurrency. Normally, when whales make big purchases of Bitcoin and move them away from cryptocurrency exchanges, it is an indication that they are consolidating their positions. This in turn means that Bitcoin gets scarcer in exchanges and thus its price index is likely to have an appreciation.
On the other hand when whales start to transfer Bitcoin to their exchanges, it is seen as a sign that some of them are looking to sell their Bitcoin in large numbers. This in turn means that the cryptocurrency’s supply suddenly gets increased in these exchanges. Therefore, the price index can fall sharply because of this sudden influx of new Bitcoin for trading purposes.
Recently, some of the whales started to deposit their cryptocurrency on major cryptocurrency exchange wallets, thus triggering a short panic sell. The price decrease from $19,400 to as low as $16,200 was witnessed before it rebounded back to $17,000. According to analysts, inflows are more than outflows and therefore, there is a selling pressure in the market.
According to Ki Young Ju, the CEO of CryptoQuant:
BTC Whales are depositing to exchanges. I expect dumping in the short-run. All Exchanges Inflow Mean(144-block MA) hit 2 BTC. I think we’re in a danger zone. The price is likely to go sideways or down when whales are active on exchanges.”
He also believes that the dip buying crowd buys the dip at the wrong time and sellout when the shorter dip they bought is converted to an even bigger one. So, it remains unclear what will happen in the near future and whether or not the cryptocurrency can bounce back from it. Long-term HODLers are unnerved by the recent drop and some are looking to buy more Bitcoin. The long-term outlook still remains deep in the bullish territory and it will take a significant move downwards to nullify the strong gains made over the course of last few months.
Image source: Isaac Kohane under CC