Whales preparing for a Bitcoin sell-off
For major Bitcoin holders, including public mining companies that hold a large share, the end of the year is an excellent time to lock in some of their profit and improve their overall financial performance. After BTC fell from $57,000 to $42,000, the whales again increased the supply of Bitcoin on exchanges, preparing for another round of sell-offs.
The "whale exchange ratio" measures the ratio of the inflow and outflow of large sums in relation to the total inflow and outflow. In early December, the influx of large capital (coefficient 0.95) led to a 26% price correction. This trend's continuation portends a correction for Bitcoin from its current price level to $36,000.
Futures traders are less supportive of whale sentiment as the funding rate has returned from the negative zone. However, there is no need to speak of any optimism yet. Funding rates rise when bulls dominate leverage and, conversely, fall when bears dominate. Currently, this rate is 0.
The share of institutional investors is much lower in Ethereum, so the December sell-off affects this coin to a lesser extent. In November, the total volume of funds in investment funds with Bitcoin amounted to $48.7 billion. The figure with Ethereum was $16.6 billion.
The quarterly futures premium for the March 2022 Ethereum contract is also outperforming Bitcoin, coming in at 2.9% and 2.6%, respectively. This confirms the higher appreciation of the altcoin's growth prospects over the next four months. In addition, unlike Bitcoin, Ethereum didn't experience much of a fall in price in November, which is when the cross-rate set a new three-year high.
Whales are gearing up for the end of the year and are selling off some of their Bitcoin holdings, which could mean a new correction wave is on the horizon.
The StormGain Analytical Group
(a platform for trading, exchanging and safeguarding cryptocurrency)