How the Bitcoin Whales Handle Losses in Turbulent Market Conditions
Despite the sad state of investors at the moment, Bitcoin seems to be on the road to recovery. Since falling from the $22,000 mark in September, the price has hovered around the $19K mark, unable to recover. Many believe that Bitcoin’s continued range-bound movement is indicative of, at the very least, a short-term uptrend.
The negative swing in Bitcoin’s price can be attributed to a number of elements that also coincide with the current global financial crisis.
To find the market bottom, investors can follow the movements of Bitcoin whales while trading on derivatives exchanges.
According to an analyst at CryptoQuant, whales in the Bitcoin (BTC) market use a predictable trading pattern to protect their assets during capitulation events, which is a good measure of market bottoms.
The verified pseudonymous analyst “ETH whale hunter” wrote in a “Quicktake” on the crypto market analysis platform that whales and funds often send BTC to derivatives exchanges to put or cover long positions during capitalization events.
Variations in Bitcoin’s Price: A Snapshot
The bottom of the market can be shown by following these whales. The expert cites monitoring the average inflows and outflows of Bitcoin exchanges as “a credible long-term bottom indicator.” In this case, an inflow of more than 2.5 BTC and an outflow of more than 10 BTC are the relevant thresholds to keep an eye on. These prices are the local bottom for Bitcoin.
On the other hand, he advised investors to enter Dollar Cost Averaging (DCA) in the market and suggested that traders use on-chain indicators such as Net Unrealized Profit/Loss (NUPL), Puell Multiple, Market Value to Realized Value (MVRV) and BTC Hashrate.
BTC whale activity to intensify
The market for BTC is experiencing more whale activity lately. In light of the increasing whaling activity in the market, the pattern to reduce whale loss has been discovered. It has been reported that whale investors are responsible for the sharp decline in BTC’s foreign exchange reserves, which have reached just 8.7% of the total amount in circulation.
As an analogy, a recent study revealed a single whale invested over $500 million in Bitcoin (BTC) purchases between September and December, eventually accumulating over 5,000 BTC.
Many potential investors are on the sidelines because they know inflation won’t slow down anytime soon and they don’t want to be caught “holding the bag”.
