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According to one warning, whale selling pressure is too strong to keep the bull market going for the time being, but parallels to 2017 present a silver lining for hodlers.
Because whales continue to transmit significant quantities of BTC to exchanges, Bitcoin (BTC) is “confirming” a bear market.
That’s according to Ki Young Ju, CEO of on-chain analytics service CryptoQuant, who on Monday warned over the “very uncertain” current state of Bitcoin.
Too many whales spoil the market?
Ki discovered the first big wave of whale selling on exchanges since July 2019 by uploading a chart of the so-called “Whale Capitulation Index.”
BTC/USD has recently finished a run to $13,900, a figure it would not reach again until October 2020.
As a result of this historical context, Ki joined the chorus of voices saying that Bitcoin’s recent all-time high of $64,500 may have been a local peak.
“I hate to say it, but it appears that the $BTC bear market has been confirmed,” he said in the comments section.
“Too many whales are sending $BTC to exchanges.”
The data piqued the interest of statistician Willy Woo, who observed last week that hodlers were once again adding to their positions, digging up supplies at prices slightly above $30,000.
A request for data on whales’ behavior during 2017 yielded a chart showing three distinct episodes of coins being sent to exchanges en masse. This, as the Twitter user who provided it highlighted, did not stop BTC/USD from hitting its then all-time high of $20,000 by the end of the year.
Continuing, Ki himself acknowledged that it may not pay to stay bearish on Bitcoin beyond the short term.
“To be clear, I expect my $BTC bearish bias won’t last long (maybe just a few weeks) because the market looks good in terms of supply/demand in the long term (e.g., Stablecoins ratio(USD) and SSR),” he added.
“So don’t get me wrong, I’m not saying it’s over.”
China sends Puell Multiple tumbling
As previously noted, a variety of variables appear to be contributing to Bitcoin’s price decline.
The most noticeable change is likely the seismic shift among miners as a result of China’s crackdown, which has halted operations in some of the world’s most intense mining regions.
Commentators have dubbed the incident, which has already resulted in the shift of hashing power to other nations, the largest “attack” on the network’s history.
The network hash rate has dropped significantly, but not by more than 40% from all-time highs, but price action has held at $30,000 support.
CryptoQuant saw a comparable decline in Bitcoin’s Puell Multiple, a traditional indicator that currently places the largest cryptocurrency closer to “buy” area.