Bitcoin’s Supply Distribution Metric Credits Ongoing Selling Pressure To…
Bitcoins [BTC] varying performance has shown a healthy increase in demand every time it approached $19,000. But this time, demand has fallen despite retesting the same price. Let’s look at some of the factors that have accompanied this change and what it may mean going forward.
Here’s AMBCrypto’s Bitcoin (BTC) Price Prediction
Earlier this week, we observed Bitcoin’s estimated leverage ratio peak to new highs. This was a sign that many traders expected the market to bounce back. Fast forward to the present, and there is significantly less demand in the market than expected.
Leveraged long liquidations get rect
BTC’s demand in the derivatives market remains low compared to the level of demand at the beginning of the month. This is clearly shown by the fall in the financing rate compared to the levels at the end of September. Its open rate calculation also pointed towards a similar conclusion.
Source: CryptoQuant
As expected, the high gearing ratio was bound to entice several downsides. The estimated loan-to-value indicates a slight decrease since 11 October. This outcome is due to the liquidations that have taken place in the last two days.
Well, Bitcoin’s long liquidation metric registered a significant increase, especially in the last 24 hours. This can be seen as confirmation that leveraged positions took a massive hit as the price fell further.
Source: CryptoQuant
So does this mean the whales are selling? According to BTC’s supply distribution metrics on Santiment, most of the selling pressure at press time came from whales holding between 1,000 and 10,000 coins.
Source: Sentiment
It makes sense that the same whale category has such a significant impact on the market. This is because it currently controls the largest share of BTC in circulation.
In other words, they have the greatest influence on Bitcoin’s price action compared to the other whale categories. Notably, most of the other BTC whales haven’t contributed much to the current downside.
It is to be noted here that Bitcoin’s market cap fell by approximately $2.44 billion in the last 24 hours, at press time. Price action then rallied below $19,000 to $18,701 at the time of writing.
Source: TradingView
BTC did not dip into oversold territory despite the latest result. However, it came close.
Conclusion
Bitcoin’s current price action is unsurprising considering the highly leveraged longs that piled up earlier this week.
In addition, this observation occurred without a positive reflection on demand, thus increasing the downside risk. Bitcoin’s next move remains uncertain due to unfavorable economic conditions.
