Approaching crypto market downturn? Leading Whale liquidates all long positions
In a significant move, prominent cryptocurrency whales, including Machi Big Brother, are exiting their long positions in Bitcoin and reallocating their capital to Ethereum. This strategic pivot, based on anticipating greater upside or strength in Ethereum, involves selling substantial Bitcoin holdings amassed over years and converting the proceeds into large spot buys and long positions of Ethereum.
This rotation from Bitcoin to Ethereum is evident in a whale's recent sale of 3,142 BTC, worth around $356 million, and the purchase of over 60,000 ETH via spot buys, along with a 135,265 ETH long position valued at nearly $577 million. Another whale has followed a similar pattern, depositing Bitcoin to sell and buy Ethereum.
This shift in whale behaviour comes at a time when both Bitcoin and Ethereum have experienced a market pullback, with prices dropping. However, whales seem to view Ethereum as better positioned for a rebound or growth, possibly due to its evolving ecosystem, innovations like DeFi integrations, and tightening supply dynamics.
Market Impact
The exit of whales from Bitcoin long positions could increase selling pressure on Bitcoin, potentially weighing on its price in the near term. Conversely, increased whale accumulation and long positions in Ethereum may provide price support and bullish momentum for ETH.
This capital rotation could highlight or accelerate a market trend where investors favour Ethereum’s technological developments and growth prospects over Bitcoin’s store-of-value narrative during this phase. Such moves by whales often influence retail and institutional sentiment, possibly amplifying volatility in both assets as markets adjust to whale positioning changes.
Technical Analysis
The charts for Ethereum and Bitcoin indicate an overheated market. Ethereum has been on a relentless run, with the price moving towards $4,700. However, the RSI for Ethereum is displaying bearish divergence, suggesting that momentum may be slowing. The 26-day and 50-day EMAs are catching up to the price action for Bitcoin.
The Bitcoin daily chart shows a double rejection pattern at the $120,000 resistance level. If Bitcoin is unable to break this resistance, the market may retrace further. The low volume on breakout attempts for Bitcoin suggests a lack of buying pressure. Bitcoin is in a narrowing range and may see a sharp move if momentum falters.
The focus of attention is whether retail demand can cover the void left by whale exits. A market retracement could be a shakeout before another leg up, if new buying pressure appears. However, if the selling pressure continues, it could signal a redistribution phase, where prominent players sell their positions.
In summary, the shift in whale behaviour from Bitcoin to Ethereum is a significant development in the cryptocurrency market. This move reflects a strategic bet on Ethereum’s potential outperformance and could pressure Bitcoin prices while bolstering Ethereum, influencing broader market dynamics through whale-driven liquidity and sentiment changes.
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