CryptoQuant indicated that bitcoin could see a drop in price, even though it trades 25% higher at $17,500 than its multi-year low of June at $17,000. This is due to the Bitcoin Exchange Whale Ratio which has become overheated.
Bitcoin heading South again?
This metric shows the ratio of top 10 inflow transactions to total crypto exchange inflows. The ratio is usually below 85% in bull markets, which was the case until 2021.
It’s often much higher than that when bears control the market or CryptoQuant calls it a fake bull (market) for mass-dumping.
According to the latest report by the analytics resource, the Whales Exchange Ratio climbed above 0.925. This is a multi-year high. It was at its highest point in early 2020, just before bitcoin plummeted below $4,000 during COVID-19.
The metric has remained mostly below 0.85 since then. This coincides with the huge bull run that saw BTC reach an all-time high last November of $69,000.
In Q2 2022, it jumped above the 0.85 mark. This was the worst quarter for the asset in over a decade. CryptoQuant concluded that BTC is in danger of retracements, as there are no signs of cooling.
Bitcoin Whales Exchange Ratio. Source: CryptoQuant
BTC Price Update
BTC reached its peak in November, but has been in freefall since then. This situation deteriorated when bitcoin plunged from its peak of $30,000 to its lowest point since December 2020, $17,500 in just a few days.
The cryptocurrency gained some support over the next few weeks, reclaiming the $20,000 mark. The price of the cryptocurrency saw another surge last week, with a record breaking $40,000.
It couldn’t keep going up and fell by $2,000 after Elon Musk’s Tesla announced that it had sold 85% (85%) of its BTC holdings in Q2. It trades at $22,000 as of right now. However, it will be interesting to see if it slips again, as the Whales Exchange Ratio suggests.
Marla Brooks – Financial Analysis
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