Whale clusters show three critical support levels that Bitcoin must protect in order to see a higher high in the short term.
Bitcoin Whale Clusters (BTC) show three critical price levels to maintain a high market structure in the short term.
Whale clusters are formed when large investors buy Bitcoin and do not move it, generating unspent transactions. These clusters typically indicate where crucial support levels exist, and the logic is that BTC needs to maintain this level to see a prolonged boom.
According to Whalemap data, the three important support levels marked by whales are $10,407, $10,570 and $10,667.
Whale movements may signal the onset of a Bitcoin uptrend
Whales, individual investors with large amounts of Bitcoin, generally seek significant liquidity to buy or sell. This is because they deal with substantial buy or sell orders and manage this need by targeting highly liquid price points.
The accumulation of whales usually occurs when weak hands capitulate and usually a retail settlement in the midst of the peak of fear in the markets coincides with purchases of whales because there are large sales volumes to be absorbed.
In the last five days, there have been many unexpected reasons and events that could have driven retail investors to sell.
On October 1, the United States Commodity Futures Trading Commission (CFTC) accused BitMEX of violating the Banking Secrecy Act. Almost immediately thereafter, the BTC crashed 4.1%.
Then, on October 2, US President Donald Trump tested positive for VOCID-19. The president’s unexpected contraction of OVID-19 temporarily rocked the financial markets and added some selling pressure on Bitcoin.
The two events increased fear in the market for cryptomorphs and the price of Bitcoin fell from US$10,900 to US$10,500.
In the following days, the price recovered to $10,670 and this new resilience found corresponds to the whale clusters that formed on October 2.
Two technical factors can further boost BTC’s momentum
In addition to whale activity, there are two technical catalysts that can drive the feeling around BTC.
First, the rate of funding for Bitcoin futures at major cryptomorphic brokers is negative or neutral. When a funding rate is low, it means that most futures brokers are betting against the BTC.
An extended period of negative rates increases the likelihood of a short squeeze, which could cause the BTC to increase. One trader known by the alias „Byzantine General“ said:
„We are approaching Monday and funding is more negative. Especially at Binance, where most of the fish are. ”
In addition, since the CFTC’s charge against BitMEX, market data provider Glassnode reports that investors have withdrawn 45,000 BTC from the brokerage house. The shares were mainly transferred to Gemini and Binance, two of the leading cryptomaniac brokers.
Many industry experts have predicted regulatory action against BitMEX and the resulting Bitcoin outflow is not terribly surprising.
It can be argued that the output of BitMEX funds to two of the most trusted crypto brokers could benefit the overall market sentiment. Mainly because Gemini is considered one of the strongest brokers in the cryptosphere in terms of regulatory compliance.