The price of the leading cryptocurrency Bitcoin [BTC] is recovering and is presently trading a price of over $17.2k across top exchanges. The recent pullback comes as whale exchange deposits began to increase again.
The CEO of CryptoQuant, Ki Young Ju, reported that the All Exchange Inflows Mean indicator reached the “danger zone.” Historically, this caused BTC to suffer short-term corrections.
After the worth of Bitcoin briefly dropped to $16.2k earlier on 27th Nov., it began to show some signs of recovery. It remained above the $17.5k level for over 23 hours before another leg down.
Following the sharp drop of Bitcoin, a small volatility price range was expected. The sooner drop on 26th Nov. to $16.2k decimated exchange order books, particularly within the futures exchange. Several dollars worth of futures contracts were liquidated within several hours.
But as soon as whales began to deposit BTC to exchanges, the worth began to fall. This means that there have likely been many traders buying the dip within the derivatives market who might be getting squeezed out. Ki wrote on 27th Nov.:
“BTC Whales are depositing to exchanges. I expect dumping within the short-run. All Exchanges Inflow Mean [144-block MA] hit 2 BTC. I feel we’re within a danger zone. The worth is probably going to travel sideways or down when whales are active on exchanges.”
Some traders, just like the pseudonymous Bitcoin investor referred to as “Bitcoin Jack,” predicted this scenario. He added that investors would likely rush to buy for the dip early, resulting in another drop.
Earlier on 26th Nov., after predicting a blow-off top near the all-time high, the trader added:
“Another time-proven fact: When the price corrects Bitcoin style, 90% will buy too early and when the price goes lower, sell rock bottom.”
Following abreast of the primary prediction, the trader also revealed that Bitcoin would likely drop or consolidate for every week before it begins grinding upwards.