Bitcoin price rallied itself to reclaim over $15,500 USD yesterday despite the fact that large-scale investors (also known as Bitcoin whales) had sold off the highest amount since the first quarter of this year.
Why Bitcoin whale selling off could be bullish
Bitcoin whales selling off might sound bearish, but historically, it might represent a bullish rally coming. In previous cycles of the cryptocurrency’s trend and market movement, Bitcoin has often seen a strong rally after a major sell-off.
One possible reason for this is that whales prefer profiting during a bull run, and build their portfolio as a rally happens. Since the whales are playing with much more significant stakes and larger investments, they tend to seek liquidity and high buyer demand to tweak their positions, either selling off or adding to their holdings.
Bitcoin tends to recover after a whale cluster sells off because it reduces the short term selling pressure on Bitcoin. Since whales have such a massive say in the cryptocurrency’s value, there is significant room for market manipulation. A major sell-off from the whales tends to even out the market between casual and retail traders and the larger-scale investors like institutions and Bitcoin whales.
Bitcoin’s current volatility might make this the best time to buy
After several months of stable trading and slow steady growth, the past weeks have served the cryptocurrency with volatility. This has a number of factors causing, from the US election and the recovery of the US dollar to the announcement that the COVID19 vaccine trial is seeing success. While volatility has a risky connotation; the potential for reward is significant, especially coupled with the positive sentiment that has been surrounding the token since the beginning of the second quarter this year.
As CryptoQuant’s Ki Young Ju highlighted, this makes this one of the best times to buy Bitcoin:
The buy-the-dip indicator.
Buy $BTC when victim whales deposited to exchanges after the plunge.https://t.co/lfuXNnXGWI pic.twitter.com/W3WjGExFRf
— Ki Young Ju 주기영 (@ki_young_ju) November 11, 2020