Bitcoin bulls should brace for an impact from traders holding larger quantities of the cryptocurrency tokens, warns Robbie Liu.
In his Friday note, the OKEx investment analyst said that the so-called “whales” may take advantage to dump Bitcoin as it trades inside the $19,500-20,000 range. He noted that the area has become too difficult to break, adding that the next sessions would see “a battle between the whales and retail traders” as Bitcoin tries to reach $20,000.
THE RETAIL TRADERS’ DILEMMA
For instance, the long/short ratio on OKEx plunged from 1.08 to as low as 0.78 between late last weekend and Monday. It was the same period wherein the BTC/USD exchange rate rallied higher. That showed that retail traders anticipated an extended bearish correction in the spot market. But on Tuesday, Bitcoin established an all-time high.
“The subsequent $1,800 pullback may have also caused these traders to be caught out of position,” noted Mr. Liu.
The analyst added that retail traders now don’t have a clue about the next Bitcoin price direction. A high selling activity inside the $19,500-20,000 range limits their long exposure, while an equally assertive buying sentiment between $18,000-18,500 reduces their short opportunities.
BITCOIN WHALES TO OVERTAKE
Ki-Young Ju, the CEO of CryptoQuant, tweeted Thursday that Bitcoin inflow across all exchanges is going upward, pointing to an increase in whales’ deposits. That typically leads to sell-offs.
“If you look at all exchanges inflow mean(144-block MA), it hit over 2 BTC a few hours ago,” stated Mr. Ju. “We hit 2.5 BTC when the price was tapping $20k. It was the eight-month high since the March great sell-off.”