The FUD (Fear, Uncertainty, and Doubt) news may have made new entrants in the cryptocurrency market sell Bitcoin (BTC) but it hasn’t budged the whales from accumulating. The recent news from the Chinese government that it is planning to “crackdown on Bitcoin mining and trading behavior” has rattled the market especially the traders and short-term investors.
In fact, it caused a fresh selling spree causing the market to reach US$36,200 level. This news led to a renewed fall in bitcoin prices and has consequently brought an excellent buying opportunity for the whales.
Bitcoin Derivatives Indicators Signal Accumulation by Whales
The long-to-short net positioning ratio is available from the data provided by the cryptocurrency exchanges. You can get a clearer view of traders’ bullish or bearish leaning by looking at the perpetual and futures contracts.
On the OKEx crypto exchange, the long-to-short ratio of the whales and market makers reached 1.08 in the early hours of May 21, 2021. It clearly shows that longs are favored by the whales by 8%. It is also worth mentioning that this is the lowest long-to-short ratio in the last 30-days. This indicates a lack of conviction. Over the day’s progress, these whales favored longs by 62%, especially when the Bitcoin price dipped below the US$37,000 level.
Volume Spikes shows that the Whales are Buying at Price Bottoms
By looking at the trading volume figures it can be confirmed that the whales and market makers bought Bitcoin (BTC) aggressively on May 21, 2021, as the market dipped to US$36,200 level.
In just 4-hours, the volumes in the spot exchanges surpassed US$5.6 billion. Even in the case of a 12% price movement, this level is extreme. You can get a perspective of things by checking the daily average volume in the last 30-days, which was just US$11 million.
By combining the data of extreme surge in the volume of BTC in spot exchange with the long-to-short ratio of derivatives exchanges, it is evident from the fact that whales bought as the BTC price dipped on May 21, 2021. Analysts believe that these heavy hands bought Bitcoins heavily to maintain their position for a very long time.
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