Bitcoin (BTC) whale clusters show that the $23,409 level has become an area of focus for large traders. This indicates that the ongoing bull run is buoyed by whales continuing to accumulate above $23,000.
Whale clusters form when whales purchase Bitcoin and do not move their BTC holdings from the price of purchase. Clusters are useful in determining Bitcoin’s support levels, especially when the market moves rapidly.
Bitcoin whale clusters. Source: Whalemap.io
“Should not be going lower than $23,409”
According to analysts at Whalemap, a data analytics firm that tracks Bitcoin whale activity, BTC has formed a strong floor in the $23,000 to $23,500 range. They said:
“Surprisingly large amounts of losses were flowing on-chain at 19k prices. When this happens in bullish conditions BTC gives us nice rallies (10k–>20k last time). We have multiple strong supports at recent prices as well… Should not be going lower than $23,409.”
It is important for Bitcoin to establish solid support areas during a bull run due to the risk of sudden corrections. If whale clusters are present at high price levels, like $23,409, then whales are likely to bid slightly higher and sustain Bitcoin’s momentum.
Peter Brandt, a long-time trader, pinpointed the parabolic line of Bitcoin dating back to October as a key area to watch.
Daily BTC/USD price chart with trendlines. Source: TradingView.com, Peter Brandt
The line indicates $24,000 as the critical support area, which would mean BTC needs to stay above it to prevent a large drop. Brandt wrote:
“Bitcoin $BTC is advancing in parabolic move from Sep ’20 low. I expect this curve to be violated at some point, but not to produce 80% decline. Green curve is a larger parabolic advance from Dec 2018 & Mar 2020 lows. This is the driver of bull market.”
In the near term, the whale clusters and the parabolic trendline show that $23,409 and $24,000 are the two key levels Bitcoin must hold.
Below $24,000, the chances of an accelerated correction increase, which could worsen if whale cluster support areas are breached.
Where would BTC top out at?
Traders generally believe Bitcoin could rise to two levels: $30,000 and $36,000. The latter has become a popular near-term prediction because the options market indicates a high probability of $36,000 being hit in the upcoming months. Of course, the former is a key psychological level.
A pseudonymous trader known as “Byzantine General” said that he foresees Bitcoin topping out at $30,000. He explained that $30,000 is the “golden ratio extension” level and also has sell orders on Coinbase and Bitfinex. He said:
“I think this rally tops out mid-term around 30k. It’s the golden ratio extension. Also happens to be where CB & Finex got fat asks laying around.”
On Dec. 27, Cointelegraph reported that Bitcoin immediately saw big volatility, ultimately shedding 6.5% within a span of a few hours after the price topped out at $28,200 across major exchanges. Given that resistance areas with heavy sell order scan be met with large pullbacks, the $30,000 area could present a major short-term roadblock to Bitcoin.
Title: Bitcoin whale clusters pinpoint key support level for the rally to continue
Sourced From: cointelegraph.com/news/bitcoin-whale-clusters-pinpoint-key-support-level-for-the-rally-to-continue
Published Date: Sun, 27 Dec 2020 18:39:21 +0000
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