Bitcoin may see a sharp correction as whales surge in Bitcoin inflows to exchanges

Since reaching its all-time high, Bitcoin price has been unable to break above $19,400 to find support. This is likely due to the possibility of whales selling heavily in the $19,400 to $19,600 range to prevent the all-time high from being breached. Above the all-time high, there is little resistance until a new upper limit is reached.

Bitcoin whales flowing into exchanges. Source: CryptoQuant

Whales continue to sell whenever BTC approaches all-time highs

Data from CryptoQuant and Whalemap suggest that the $19,500 level is an important area for whales.

First, there is a large whale cluster at around $19,500. This means that whales bought BTC here and did not move their holdings, which could make it a profit zone.

In addition, as the price of Bitcoin exceeds $19,500, the amount of Bitcoin flowing into exchanges by whales has been increasing. This indicates that whales are actively selling Bitcoin or shorting at $19,500 or even higher.

An anonymous trader named “Byzantine General” also highlighted that there are a large number of sell orders on Binance. He pointed out that the $19,500 level will be a difficult resistance for buyers to break through.

$19,500 will be difficult to break.

— Byzantine General (@ByzGeneral) December 3, 2020

What will happen to Bitcoin in the short term?

In the short term, analysts are divided on Bitcoin’s short-term outlook. Some say that a sharp correction is still possible, especially if Bitcoin continues to be rejected at the $19,500 level.

Ki Young Ju, CEO of CryptoQuant, said he expects Bitcoin to move sideways or down in the short term. He wrote:

“I am long-term bullish on Bitcoin, but I think it will consolidate for a few days or get a correction. I think in the short term, Bitcoin is unlikely to break through $20,000. I expect it to break through $20,000 by the end of this year. All in all, some whales stopped hoarding coins, and I am short-term bearish.”

Ki noted that Bitcoin whales are no longer hoarding Bitcoin at current prices. He explained that it is difficult to separate institutional buying from spot buying. However, he said that Bitcoin’s stalled rally coincided with whale selling. He added:

“The battle for $20,000 will be between Bitcoin whales and retail investors. I am short-term bearish. I know on-chain data doesn’t show that institutions are buying spot. But it looks like the current Bitcoin whales stopped moving in favor of the upside.”

According to data from CryptoQuant, Bitcoin whales are flowing into exchanges with the largest amount of Bitcoin since July. This data coincides with the Bitcoin price being rejected at $19,400 consecutively.