After Bitcoin (BTC) price suddenly dropped from around $18,500 to $17,200, some traders began to question whether a local top had formed but there are multiple factors that suggest the bull run is still intact.
Following the initial pullback, BTC continuously showed extreme volatility, demonstrating market uncertainty.
The four factors that show Bitcoin’s momentum remains strong are whale inflows, a strong market response, resilience above each whale cluster, and high open interest.
Whales are not selling large amounts of BTC
According to data from CryptoQuant, whales are not selling large amounts of BTC. This trend is noteworthy because Bitcoin is testing a heavy multiyear resistance level at $18,000.
Ki Young Ju, the CEO of CryptoQuant, said the Exchange Whale Ratio remains low. Given the relatively low selling pressure from whales, Ju said:
“Dear $BTC shorters, You can call me a moon boy, but unfortunately, there won’t be a mass-dumping like March this year. Exchange Whale Ratio (90-day MA) is still very low. Long-term bullish is inevitable.”
If the selling pressure coming from miners and whales remains low in the short term, BTC could have sufficient firepower to kickstart a broader rally.
Bitcoin remains resilient above key whale clusters
Whalemap, an on-chain market analysis firms that tracks whales, have found a similar trend. The analysts said that whales accumulated BTC throughout November The price points from which whales bought BTC are holding.
In the near term, the key whale cluster support for Bitcoin is at $16,411. As long as BTC stays stable above the $16,400 support area, the bull run will probably hold together.
A whale cluster forms when whales buy Bitcoin at a certain price level and do not move them elsewhere. The analysts explained:
“Bubbles indicate prices at which whales have purchased BTC that they are currently holding. Bubbles also visualise support levels. Last time we bounced from $15,762 and had a 15% price increase. Is the new bubble at $16,411 going to hold this time as well?”
Strong market response after a steep pullback
In addition to favorable whale data that depict the resilience of Bitcoin, every major dip has been quickly bought up in the last 24 hours.
On Nov. 18, Bitcoin dropped to $17,215 and $17,284, recording large pullbacks from its $18,520 peak. Yet, BTC recovered almost immediately after each minor correction, stabilizing above $17,600 for most of the time.
Open interest is growing
Data from Skew shows that the open interest in the Bitcoin futures market is increasing. The open interest of the futures market shows the sum of all long and short contracts.
High open interest typically means that there is a significantly high number of traders speculating on the price of Bitcoin.
In the near term, this means major price movements are inevitable. Whether the volatility spike would cause BTC to increase or suffer a deep correction remains to be seen.
However, based on the optimistic whale data and the market’s strong reaction to large dips, the chances of the next volatiltiy spike favoring Bitcoin are higher.
Author: Cointelegraph By Joseph Young