On-chain data paints a grim picture when it comes to the short-term outlook for Bitcoin, according to analysts at CryptoQuant.
What Happened: Bitcoin BTC/USD was down by 4% at one point Tuesday, falling to a low of $41,379.
Signs of more volatility to come were highlighted by CryptoQuant analyst Kripto Mevsimi, who highlighted that Bitcoin’s “exchanges whale ratio” was back above 0.50 once more.
The ratio is used to indicate potential selling pressure from whales, or large Bitcoin holders, measured by the relative size of the top 10 inflow transactions to total inflows.
“It was around 0.40-0.48 since maybe 10 days and actually selling pressure was moderate,” said the analyst.
The ratio was back above 0.50 Tuesday.
“So normally, we can consider this as a short term selling however since we are in the crucial areas, we need to make sure price stays above 40K[sic],” said Mevsimi.
“Price action below 40K could be fast and volatile.”
Earlier this week, popular crypto trader Pentoshi estimated that Bitcoin could trade as low as $37,000 for a brief period based on his technical analysis.
“We can see bids have been stacked on exchanges at those levels with the intent to fill, but the sheer size of them is something I've never seen before across most exchanges,” he said.
“The bottom is closer than you think, and the top is likely a number you can't comprehend at this time.”
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