Whales Block Bitcoin, Ethereum From Reaching Heights

Key Takeaways

  • Bitcoin is up more than 10% since November 11, but now the TD sequential indicator flashes sales signals.
  • Similarly, Ethereum recovered despite the growing sales pressure behind it.
  • BTC and ETH whales have been drastically reducing their positions over recent weeks, suggesting further losses on the horizon.

Share this article

Bitcoin and Ethereum ended the weekend with a bang. Despite the bullish move, pushing the tickets up more than 4%, data on the chain reveals that large investors have been unloading their tokens on each increase.

Whales Block Bitcoin at Every Turn

While retail investors remain extremely bullish about Bitcoin price action, whales have been taking every opportunity to realize profits.

Chain data from Santiment reveals that the number of addresses holding 10,000 to 100,000 BTC has dropped significantly in the past month. Since November 18, about seven whales have left the network or redistributed their tickets, representing a 6.2% decline over a short period.

The growing sales pressure behind the leading cryptocurrency may seem insignificant at first glance.

Still, considering these large investors have between $ 19 million and $ 1.9 billion in BTC, the spike in sales orders can translate into billions of dollars.

Distribution of BTC Holders by Santiment
Distribution of BTC Holders by Santiment

From a technical standpoint, Bitcoin also looks bearish regardless of the high volatility that the cryptocurrency market is going through.

The TD sequence presented general sales signals, suggesting that BTC is sitting in over-occupied territory. The bearish formations developed in the form of a nine-green candlestick on the 1-month, 1-week and 4-hour chart, predicting one to four month candle correction each month.

Such market behavior indicates that the partial price recovery seen on December 13 is likely to result in further losses.

Bitcoin US dollar price chart
BTC / USD on TradingView

Nevertheless, IntoTheBlock’s “Global In / Out of the Money” (GIOM) model reveals that Bitcoin sits atop a huge wall of demand that could prevent it from steeper decline.

Based on this chain metric, more than 2 million addresses bought over 1.20 million BTC between $ 18,300 and $ 19,300.

Only a candlestick close to the $ 18,300 support level will help validate the pessimistic outlook.

If this were to happen, the cryptocurrency bellwether would likely drop to seek support around the nearest interest area that sits between $ 10,700 and $ 14,900.

Bitcoin Global In / Out of the Money by IntoTheBlock
Global In / Out of the Money by IntoTheBlock

Given the lack of any supply barriers ahead, there is a small chance that Bitcoin will be able to shift all sales signals and continue to rise towards new highlights at all times.

Investors must watch for a candlestick near the recent high of $ 19,915 as it will invalidate the pessimistic outlook and result in an increase toward $ 24,000 or higher.

Ethereum Holders Sell the News

The launch of the Beacon Chain appears to have been a “sell the news” event to Ethereum holders.

While market participants continue to maintain their ETH, network activity has been declining significantly.

The number of transactions on the chain in excess of $ 100,000 plummeted 55%, while the number of new addresses joining the network dropped by 47%.

The downward trend in network activity is a worrying signal for ETH’s near-term price action given that some whales have been unloading their coins in recent weeks. The Santiment holders’ distribution chart shows that since November 20, the number of addresses holding 100,000 to 1 million Ether has fallen 6.60%.

Distribution of ETH Holders by Santiment
Distribution of ETH Holders by Santiment

As sales pressure rises, the TD sequential indicator predicts that the smart contract token will no doubt decline steeply. This technical index presented sales signals in the form of nine green candlesticks on a 1 week and 1 month ETH chart.

The bearish formations suggest that a further increase in sales orders around current price levels could take ETH on a wild downward journey.

Ethereum US dollar price chart
ETH / USD on TradingView

IntoTheBlock’s GIOM model suggests that the $ 565 support level is critical for Ethereum’s trend.

Based on the high demand around this price barrier, only a candlestick close to this level will validate the pessimistic forecast. If this were to happen, the cryptocurrency could become second-largest by diving market capitalization and seeking support around the $ 450 or $ 320 level.

Ethereum Global In / Out of the Money by IntoTheBlock
Global In / Out of the Money by IntoTheBlock

Conversely, the only significant supply barrier ahead of Ethereum sits at around $ 620. Turning this wall of resistance into support will jeopardize the bearish outlook and push this altcoin to new annual highs.

On its way up, Ether could target $ 720 and even $ 800 if the buying pressure behind it is substantial enough.

Uncertainty Dominates Bitcoin, Ethereum

While institutional investors have made it clear that they intend to continue adding cryptocurrencies to their balance sheets, the short-term future of Bitcoin and Ethereum remains uncertain.

Both cryptocurrencies have flashed the sale of signals on their monthly charts, according to TD setup. Meanwhile, the Crypto Fear and Greed Index is hovering at an all-time high, sensing “extreme greed” among market participants.

These bearish signals are too significant to ignore regardless of the optimism in the cryptocurrency market.

If the spike in sales pressure seen during the week of Dec. 7 intensifies, Bitcoin could be ready to lose $ 18,300 in support and aim for $ 14,000. Ethereum, on the other hand, will have to break below the $ 565 barrier to drop toward $ 400.

Failure to do so by climbing above their respective peaks will signal the end of correction and lead to higher peaks.

Share this article