Whales Absorb Retail Sell-Offs, Bitcoin Eyes $105,500
1min read Bitcoin's price has been on a steady rise, approaching its all-time high, despite a cautious market sentiment and balanced derivatives demand. Recent data indicates a significant divergence in trading behavior between retail investors and whales, with retail traders selling a substantial amount of Bitcoin while whales are absorbing the selling pressure. This disparity in market sentiment could hint at potential volatility in the market.
According to insights from CryptoQuant, retail investors have deposited around 6,000 BTC onto Binance in recent weeks, outpacing whale inflows, which have dwindled considerably. This surge in retail deposits is primarily driven by panic among investors seeking to liquidate their holdings in a bear market. In contrast, whale deposits have decreased dramatically to around 1,000 BTC, indicating that these large investors prefer to hold onto their assets rather than trade them on exchanges. This behavioral disparity serves as a bullish indicator, suggesting that whales may anticipate a price correction or upward trend.
The influx of retail investments into exchanges has historically created downward pressure on prices. However, COINOTAG's analysis indicates that the larger market players—whales—are actively absorbing this selling pressure. Notably, the total inflow into exchanges has reached a monthly low of 2.33 million BTC. This contraction in inflow suggests that a considerable portion of retail investors are choosing to hold onto their Bitcoin rather than sell it, which is generally a bullish sign for potential price recovery.
Moreover, the declining Stock-to-Flow Ratio for Bitcoin, dropping to 0.26, emphasizes this accumulation trend. A value of 0.26 suggests that Bitcoin is trading considerably below its projected value, often leading to accumulation phases that contribute to price surges in the future. Historically, significant accumulation phases often precede abrupt price increases, as seen in past trends. As a result, despite active sell-offs by retail traders, it appears that whale accumulation could fuel further Bitcoin rallies, potentially pushing prices back towards $105,500.
In summary, while retail traders continue to liquidate their positions, whales are showing resilience by absorbing the selling pressure. This ongoing divergence in trading behavior could lead to favorable conditions for an upward price trend for Bitcoin, particularly as it targets levels near $105,500. If the current patterns persist, Bitcoin may stabilize and set sights on a potential rally beyond $107,000.
