The price of Bitcoin (BTC) dropped sharply by 10% in a single day on September 4th. After the drop, sentiment around the cryptomoney market became remarkably cautious with the Cryptocurrency Fear & Greed index showing „fear“ for the first time since July.
A massive Bitcoin buy order at $8,800 on Bitfinex
Bitcoin Price Could Hold at USD 10,000 as Gold Nears ‚Turning Point‘ for Stocks
However, market data shows that whales are preparing to buy Bitcoin at a support level of $8,800. It indicates that a drop similar to that of March 13, when BTC dropped to only $3,600, is unlikely to occur.
Why did Bitcoin fall and why are the whales still pushing it?
Analysts mainly attribute the Bitcoin correction to the massive sale of the miners. Before the fall, analysis company CryptoQuant pointed out that mining groups were moving to sell BTC.
After tracking the outflows of the main pools, the data showed that the miners moved unusually large amounts of Bitcoin to the exchanges. Soon after, the price of Bitcoin began to fall, and eventually dropped to less than $10,000. The researchers said:
Researchers said: „The miners are moving unusually large amounts of #BTC since yesterday. #Poolin, #Slush, #HaoBTC have taken the bitcoins out of the miners‘ wallets and sent some to the exchanges“.
When the trend of Bitcoin changes initially, it tends to spread to the furthest level of support or resistance. On March 13, for example, BTC quickly crashed to just $3,600 before a significant rebound. From April to September, Bitcoin recovered from $3,600 to over $12,000.
As such, the whales may be expecting Bitcoin to fall to lower support levels, which include $8,800.
„Nice to see you again, Bitfinex whale,“ said on-chain analyst Cole Garner today. „Smart money has its offers at $8,800. I hope the fund is out there.
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The data could indicate that the whales anticipate a major setback in the near future. But it also shows that they don’t anticipate a massive correction from previous Bitcoin Investor setbacks.
Since March, the BTC price has recovered 247%, so a correction is unlikely to have come as a surprise to many traders. As reported today, Raoul Pal, CEO of Global Macro Investor, said that the 25% to 40% retracements in a bullish market are typical of Bitcoin.
„In post-halving bull cycles, bitcoin can often correct 25% (even more than 40% in 2017), throwing traders off course (or giving swing traders a chance on the short side). Is there a DCA opportunity ahead?