Bitcoin bearish signal: whales are going to crash
On-chain data shows that the Bitcoin exchange whale ratio is beginning to rise sharply, a sign that these giant holders may be starting to dump.
Whales are currently behind nearly 90% of Bitcoin exchanges influx
As noted by an analyst in a CryptoQuant afterwhales may ramp up dumping, a sign that could be bearish for the price of BTC.
The “exchange whale ratio” is an indicator that measures the ratio between the sum of the top ten Bitcoin transactions to exchanges and the total inflow of exchanges.
Since the top 10 trades to exchanges tend to be whales, this statistic can tell us something about the relative magnitude of whale influxes to the rest of the market.
When the value of this statistic is high (i.e. more than 85%), it means that whales currently make up a very large proportion of the total influx of exchanges.
Particularly high readings may indicate that whales are dumping massively at the moment, something that could be bearish for Bitcoin’s price.
On the other hand, the indicator with values below 85% may indicate that whale sales in the market are currently at healthy levels. During bull runs, the stat usually stays within this range.
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Here is a chart showing the trend in the Bitcoin exchange whale ratio (72 hours MA) over the course of 2022 so far:
The value of the indicator seems to have increased recently | Source: CryptoQuant
As you can see in the chart above, the Bitcoin exchange-whale ratio has skyrocketed and is now approaching 90%.
This suggests that whales may now be dumping more. Earlier in the month, the ratio crossed 90% and the price of the coin plunged below $26k.
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If the indicator continues to climb and this time also follows a similar trend, more downside may lie ahead for the cryptocurrency.
At the time of writing, Bitcoin’s price is hovering around $29.7k, down 6% over the past seven days. The crypto has fallen 25% in value in the past month.
The chart below shows the trend in the price of the coin over the past five days.
It seems that the price of the crypto has largely moved sideways in recent days | Source: BTCUSD on TradingView
Since Bitcoin’s rapid rebound above the $30k level of the crash to below $26k, the coin has not shown much movement.
At the moment, it is unclear when BTC can break out of this consolidation it has been stuck in for the past week.
Featured image from Unsplash.com, Charts from TradingVIew.com, CryptoQuant.com