Price Dynamics and Whale Signals in Bitcoin Market

Following a prolonged period of quietude near the crucial threshold of $30,000, there has been a notable resurgence of activity leading to a swift and substantial drop in price.

Nevertheless, the present situation demonstrates the price's consolidation in proximity to the critical support range of $25,000. This juncture holds the potential to establish a floor for the price, potentially impeding any further downward trends.

Analyzing the Numbers

By Shayan

The Daily Diagram

After a minor corrective phase, where the price exhibited a bearish divergence alongside the RSI indicator, Bitcoin faced a forceful rebuff, resulting in a rapid descent. This recent downturn prompted the price to breach a significant and pivotal support zone encompassing the 100-day and 200-day moving averages, indicative of an overarching bearish sentiment pervading the market. As a result, the cryptocurrency experienced a dip, ultimately landing in the pivotal support area of $25,000.

Nonetheless, the price action within this pivotal support area bears notable significance, as the $25,000 mark has historically functioned as a psychologically crucial support level. Consequently, if it garners support and witnesses an uptick in buying activity, market participants may foresee a potential reversal.

Conversely, in the absence of such support, there exists the possibility of the price breaching this mentioned support level, which could potentially trigger a cascading effect, propelling it towards the prominent support region at $20,000.

Origin: TradingView  

The 4-Hour Chart

Shifting focus to the 4-hour chart, it becomes apparent that the price is ensnared within a static range, fluctuating between the notable resistance at $30,000 and the significant support at $25,000. Following a swift descent from the resistance zone at $30,000, BTC is now positioned near the lower boundary of the range, resting close to the $25,000 support zone.

Despite this descent, the support at $25,000 holds the potential to fend off further near-term declines due to the existing demand around this critical range. Consequently, a favorable response within this defined range could potentially pave the way for a fresh upward trajectory, propelling the price towards the substantial resistance level at $30,000.

Conversely, a dip below the $25,000 mark could potentially set the stage for an extended bearish phase, potentially ushering in further decline towards lower support regions.

Source: TradingView  

On-chain Evaluation

By Shayan

The "Exchange Whale Ratio" assesses the proportion between the top 10 significant inflows and the total inflow volume on cryptocurrency exchanges. Elevated readings of this metric signify notable funds from prominent players, commonly referred to as "whales," being transferred onto exchanges.

At present, the Exchange Whale Ratio has surged subsequent to marking its lowest point since February 2018, coinciding with the price's rapid descent. While a low ratio might not have an immediate impact, historical trends demonstrate that its rebound often exerts a detrimental influence on Bitcoin's price.

In line with this, back in February 2018, as the ratio rebounded from an all-time low, BTC's price peaked and subsequently entered a downturn. This underscores that a sudden upswing in the ratio could potentially point towards a downward trajectory for Bitcoin's price.

Origin: CryptoQuant