Key Points
- Bitcoin’s recent bounce back was reportedly due to whales accumulating BTC, but data suggests otherwise.
- Market volatility and potential liquidations could be triggered due to the increase in leveraged positions.
On September 2, Bitcoin [BTC] experienced a 3% increase during the trading session, a performance supposedly sparked by reports of whales accumulating Bitcoin.
However, the cryptocurrency’s struggle to maintain this momentum casts doubt on these reports.
Whale Activity and Market Volatility
Lookonchain data indicates that whales have been moving Bitcoin onto exchanges despite healthy outflows, suggesting an attempt to incite more market volatility.
In contrast, negative netflows from Bitcoin ETFs have been observed, which does not inspire much confidence.
An assessment of Bitcoin addresses showed a decrease in the number of addresses holding between $100,000 and $1 million worth of BTC from late August to early September.
Inducement Set-Up and Leveraged Positions
The data confirms that a significant number of whales have contributed to sell pressure, possibly as part of an inducement attempt to hype the market and provide exit liquidity for sellers.
This could explain Bitcoin’s struggle to sustain recovery above $60,000.
An increase in long positions indicates growing expectations of more upside, coinciding with a resurgence of appetite for leverage.
The market’s embrace of more leverage could potentially lead to heavy liquidations in the event of another crash.
At press time, Bitcoin was trading at $58,861, after a 0.47% discount in the last 24 hours.
This suggests that the market has been struggling to maintain momentum, aligning with the observed sell pressure from whales and highlighting the possibility of liquidations if the price dips lower.
The next 24 hours will be critical for Bitcoin as the market awaits the next FED decision regarding interest rates, which could result in a volatile second half of the week.
