Key Points
- Bitcoin whales are unwinding their long positions, indicating a potential short-term correction for Bitcoin.
- Increased whale activity on exchanges and capital rotation from Bitcoin to other assets like Ethereum could further influence a price drop.
Bitcoin [BTC] recently surged to $103,443, the first time since February 3rd that it closed above the $100,000 mark, according to Binance’s daily chart.
Despite this, on-chain and derivatives data suggest a different narrative – one where leverage is drying up and whale conviction is waning.
Bitcoin Whales Losing Momentum
Historically, whenever Bitcoin rallies to the $103,000 level, Open Interest usually hovers above $68 billion.
However, at the time of writing, Bitcoin’s Open Interest was at $61.3 billion, indicating that traders were opening fewer positions than before.
The Whale Position Sentiment reveals that whales are currently closing their long positions, signaling a potential market shift.
Potential Direction for Bitcoin
To predict where Bitcoin might decline to, liquidity clusters on the Liquidation Heatmap were analyzed.
A key liquidity pocket around $98,500, with over $103 million in leverage stacked, could be a potential drop zone if selling intensifies.
A deeper cluster lies between $93,400 and $92,900, which could attract the price if bearish pressure builds.
The Exchange Whale Ratio has climbed to 0.4, reflecting increased whale activity on centralized exchanges.
Whale inflows of BTC into centralized exchanges, including a 1,500 BTC transfer into Coinbase and two 500 BTC transfers into Robinhood, typically indicate intentions to sell.
Moreover, the BTC/ETH chart continues to trend downward, suggesting that capital is rotating out of Bitcoin and into other assets, including Ethereum [ETH].
This trend has been observed since the start of the year, and the recent rally confirms that there are currently more sellers than buyers trading Bitcoin.
Therefore, if whales continue selling and liquidity keeps flowing out of Bitcoin, the asset is likely to experience a notable drop.
