These Bitcoin sightings suggest that a range change could be…
Bitcoin [BTC] is back over $20,000 again, but this time there is a significant lack of enthusiasm around it. This is because the cryptocurrency has bounced back and forth between $17,000 to $22,000.
The royal coin has shuffled within the same range in recent weeks. BTC whales played a significant role in activating the range by buying near the bottom of the range and selling near the top of the range.
However, there are some recent observations that strengthen the case for a potential near-term eruption despite previous gloomy outlooks.
A comparison between the Bitcoin exchange’s whale ratio and BTC’s foreign exchange reserves revealed an interesting picture. The latter had been declining since March while the former was gradually rising.
Source: CryptoQuant
The exchange whale rate has notably reached higher lows since May. This confirmed that whale activity on the exchanges witnessed an increase.
Such an outcome confirmed that larger amounts of BTC were being traded, thus paving the way for more volatile price changes.
The declining currency reserves confirmed that Bitcoin had been flowing out of the exchanges in recent months. Investor sentiment also appeared to have shifted in favor in recent days, particularly in the derivatives market. This was clear in view of the increase in open interest rates and financing rates in the derivatives market.
Source: CryptoQuant
Both open interest rates and financing interest rates in the derivatives market have increased significantly in the last two weeks. The current open interest levels were significantly higher than they were on September 12, which was the peak of the previous bullish attempt.
These observations were also consistent with the observed increased demand for BTC from whales and institutions.
Incoming BTC Demand: A Ride to the Stars?
The benchmark for the purpose of Bitcoin ETF holdings confirmed that the ETF trimmed its balance significantly over the past 30 days. These outflows leveled off in late September, and the same metric indicated accumulation over the past three days.
Source: Glassnode
The BTC addresses with a balance greater than the 1000 BTC benchmark behaved almost similarly to the Purpose BTC ETF calculation. This confirmed that whales have been offloading BTC in September and more importantly, they have started hoarding the coin in the last two days.
Unsurprisingly, BTC’s price managed a general upside since September 22, around the same time that derivative funding rates and open interest fluctuated.
Bitcoin’s upside during October 4 trading increased to $20,475 after interacting with the 50-day moving average.
Source: TradingView
Bitcoin’s higher open interest on September 12 is of particular interest. It may indicate more demand at the current price level compared to the previous peak that the price had not yet reached, and thus a form of divergence.
In addition, these sightings occurred as the accumulation of cetaceans and institutions began to recover from the lower area. Bitcoin mining hashrate also continued to rise, thus trading in favor of today’s sentiment.
These findings do not necessarily constitute confirmation of a price increase, but can be considered noteworthy, especially if demand continues to grow. Bitcoin may finally rally enough volumes to break out of the current range, but that remains to be seen.
