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Tuesday, November 24, 2020

Bitcoin whale clusters pinpoint 3 key levels for BTC price rally to continue

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According to Whalemap, there are three major Bitcoin (BTC) whale clusters in the near term that might serve as key technical levels. The $11,857, $12,256 and $12,868 levels would likely act as important support and resistance areas.

In previous cycles, whale activity coincided with significant price movements at crucial technical levels. For instance, Cointelegraph reported that a whale sold at $12,000 after “HODLing” for years. In the next few weeks, BTC dropped to sub-$10,000.

Bitcoin whale clusters. Source: Whalemap.io

What are whale clusters and why are they important?

Whale clusters form when whales buy Bitcoin and do not move their BTC holdings. This indicates that whales are accumulating BTC in the areas where the clusters materialize.

The larger Bitcoin whale cluster has formed at $11,857, with previous clusters at $11,288 to $11,465. In the near term, that signifies that the $11,857 is considered a big support area by whales.

Now, Bitcoin would have to remain above $11,857 or consolidate above it to see a broader rally. The ideal technical structure for a rally continuation would be to stabilize at $11,900.

After a major rally, some consolidation to neutralize the futures market could make the ongoing uptrend healthier.

Since Oct. 2, in just over three weeks, the price of Bitcoin climbed 24% against the U.S. dollar. In the same period, gold has slightly risen by 0.2%, as BTC outperformed most risk-on and safe-haven assets.

Throughout most of the rally, the futures market demonstrated negative or neutral funding rates. As such, the rally itself was not highly overcrowded and is not in danger of a large pullback.

Still, a corrective price movement following a month of consistent rallying could further stabilize the upward movement.

Why are whales accumulating BTC at these price points?

Whales might have been buying all the way from early $11,000s to $12,000 due to the context of the current rally.

Technically, Bitcoin broke out of a three-year range, with the daily chart confirming the highest price point since January 2018. As Cointelegraph reported, the daily candle of Bitcoin has never closed above $12,900 for nearly three years.

Atop the technical reasons, the perception of Bitcoin as a potential competitor against gold is also strengthening alongside network fundamentals. Consequently, the institutional demand for BTC has considerably spiked as seen by the rise of the CME Bitcoin futures market.

Meanwhile, researchers at Santiment, an on-chain market analytics firm, point out that BTC appears to be decoupling from other markets. Throughout historical bull cycles, when BTC demonstrated independent price movements, it caused the momentum to strengthen. They said:

“$BTC has historically thrived when its reliance on world markets, and other asset classes & industries, is minimal, and trading can operate independently without interference from non-#crypto events as distractions.”

The confluence of BTC’s resilience above $11,900, an important whale cluster, as well as various favorable technical factors may help BTC/USD overpower several bearish signals in the short term to keep the current rally going. 

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