Close
Bitcoin News

Bitcoin Whale Support Might Be Weak, But Sentiment Remains High

While it looks like Bitcoin whales might be looking to sell at $9,800 USD, representing weaker support, the market remains positive.

Research firm data suggests that the $9,800 USD level of support for Bitcoin whales has weakened.

According to researchers at Whalemap, a firm which tracks Bitcoin large investors (or whale) activity, the largest bubbles showing where those who hold Bitcoin without trading comes in around the $9,800 USD. Whalemap researchers explained:

As the data tracking shows, there are numerous whale clusters at $9,800 USD which have increased over the past few days. Evidence from Whalemap’s data implies that the whales who invested in at the $9,800 USD price range are now moving their Bitcoin to cryptocurrency exchanges.

What is a Bitcoin whale?

Market players and large-scale investors in the cryptocurrency market are often referred to as Bitcoin whales. These investors hold significant amounts of cryptocurrency and have the ability to move the market given the fraction of holding they have in the market. Often Bitcoin whales are instituional investors or investment funds which look after the accounts of large-scale investors. There are known whales, but Bitcoin’s nature makes it such that should a whale wish to remain anonymous, their privacy is protected.

Because whales have such a massive standing in the market in terms of their significant holding, it means two characters are represented by whales in the Bitcoin industry:

  • There is a massive buy-in to the cryptocurrency market (over 1,000 Bitcoin to be a small whale); and
  • Whales are able to move the market and have a huge influence on the price of Bitcoin if they decide to buy or sell.

The market might be heading to a bearish trend if Bitcoin price drops

The implication of the activity is that whales are transferring their Bitcoin to sell at a breakeven price or at a profit. Prior, the support levels of Bitcoin cluster was above $10,000 USD, which means that a $9,800 USD support shows weakened support. While this in isolation might not be long-term bearish for the market, as other factors are at play, weakened whale cluster support could represent a dip in Bitcoin price on the horizon.

It’s worth noting that whales can have a massive sway on the price of Bitcoin and that this could be a play at manipulating the market to sell further to drive the price. Investors buying in low in order to sell high would benefit from a short-term bearish trend with a long-term bull rally to follow. If whale clusters do sell below $9,800 USD, it’s possible that Bitcoin will take a little while to recover before investors gain confidence in the cryptocurrency again.

On the other hand, if Bitcoin remains above $10,000 USD, and whales don’t sell out, the support level becomes less important to acknowledge. As reported last week by Whalemap, the charts representing whales selling, which might continue to appear. However, this might not affect Bitcoin price. As explained:

What is the consensus about Bitcoin price?

Despite the thought that Bitcoin whales might be selling out, the general sentiment towards the future of Bitcoin remains positive.  This is important to recognise, as sentiment also has a massive influence on the price of the cryptocurrency.  With the slow decline of the US dollar and the rise in gold since countries started locking down in March, Bitcoin has become a safe-haven asset. This has attracted a lot of new investors looking to hedge their funds against possible falling economies.

Posted: Sep 19, 2020 Author: Becky Categories: Bitcoin News