Bitcoin’s price action has been choppy to say the least, with its recent rally to fresh all-time highs of $24,200 being rapidly sold into by whales and other large investors, who forced the price down to lows of $22,000 before the selloff reversed.
In the time since, the crypto has been consolidating, seeing multiple movements in both directions that have done little to provide insight into its near-term outlook.
It still faces multiple hurdles before it can form a new leg higher, with bears lacing serious resistance throughout the lower-$24,000 region – which has yet to be retested by the crypto in the time following its initial rejection.
One grave indicator that could suggest that Bitcoin will stagnate for quite some time is the spike in whale inflows into exchanges, which is historically a sign of imminent selling pressure.
A prominent on-chain analyst spoke about this trend in a recent tweet, explaining that although there is a risk that Bitcoin sees a strong selloff as a result of this trend, the massive amount of organic buying pressure may be enough to absorb it.
Bitcoin Struggles to Gain Momentum Due to $24,000 Resistance
Bitcoin has seen a strong overnight upswing from its recent lows, and bulls have been able to post some serious follow-through in the time since it plunged to lows of $22,000 following its rejection in the lower-$24,000 region.
Where it trends in the near-term should depend largely on whether or not bulls can break above $24,000 and flip this into a support region.
The fact that each tempered move higher as BTC nears this region is being met with serious resistance is a grave sign.
On-Chain Analyst: Whale Activity Could Point to Heightened Selling Pressure
The CEO of CryptoQuant – an on-chain analytics firm – explained in a recent tweet that whale inflows into exchanges coupled with heightened trading activity does seem to suggest that these large Bitcoin holders are taking profits off the table.
This may be why it has seen stagnating price action, and it could continue hampering its growth in the mid-term.
“I aware of the dumping risk as whales are active on exchanges, but I’m not short on BTC since the buying power is so strong now. I punt long with low leverage. When this indicator hits 2 BTC, it is likely to be sideways or bearish. It always has been sideways since November.”
Image Courtesy of Ki Young Ju.
The coming few days should shed some light on just how influential whales will be on the cryptocurrency’s price in the days to come.
Featured image from Unsplash. Pricing data from TradingView.