Bitcoin is not looking its best this week. Specifically, shortly after updating an all-time high of $69,000, the cryptocurrency went down and dropped below the $60,000 level. The local low at the moment is $58,553.


To illustrate, here is a four-hour chart of the coin, which shows the behavior of BTC during the last two weeks.

The four-hour chart of Bitcoin

What will happen to the price of Bitcoin?

The same whale that bought 207 BTC for around $12.84 million is now holding over 110,000 BTC at its address. As noted by crypto analyst Colin Wu, the investor has added a total of 635 BTC to his wallet value since the beginning of November. Overall, the amount of his unrealized profit exceeds $4.6 billion. Which means that’s how much his earnings would be if he were to sell the coins right now.

Cryptocurrency wallet address and number of coins on it

In his article on CryptoQuant, user Greatest_Trader explained that such behavior in the form of actively buying coins at local price drawdowns is quite common for bullish cycles of Bitcoin growth. Which means many experienced investors and traders do this. Here is his rejoinder in which the expert shares his view of what is happening in the coin market.

In my opinion, whales and other big market players usually hedge their bitcoins by moving them to exchanges and opening short positions. They then buy huge amounts of BTC after the final price drop.

By hedging, they mean reducing risk. In this case, the analyst is talking about professionals opening kind of opposite positions in order not to lose their money when the market turns around. Investors do use this strategy when they want to wait out tough times in a niche. This is exactly what is happening in cryptocurrencies right now.

Bitcoin’s fall

As the expert points out, similar was true for the previous major wave of appreciation of the digital asset in 2017. Here’s his quote.

This pattern is evident for the previous bullrun, when there was a strong trend of large BTC transfers to exchanges. At the moment, it is reaching its peak again, indicating a prolonged series of coin purchases by whales around current price levels.

Which means the analyst suggests that the current actions of large investors hint at their confidence in the further development of the coin market. At least at the moment Bitcoin is trading below its all-time high of 13.7 per cent. That means the cryptocurrency has plenty of room for short-term gains in the event of a reversal.

According to Cointelegraph, Bitcoin’s final collapse brought the coin down as low as $58,500, but that line was almost immediately defended by bulls. In other words, there is huge demand for BTC, which means it is unlikely that another major cryptocurrency crash of similar magnitude will take place in the near future.

It should be noted that logical assumption does not guarantee absence of collapse, so one should not completely trust this conclusion. Always rely on your own market analysis and make decisions according to the latter.

Cryptocurrency plunge

Another news is the massive liquidation of long positions or so-called longs on Bitcoin worth over $875 million in just one day. As a reminder, liquidation is a mechanism of forced closing of positions of a trader who works with borrowed funds of the exchange. We wrote more about it in this article.

History of large daily liquidations in Bitcoin trading

What exactly does a liquidation tell us about? This event most often results in a reduction in the volume of open positions and “clearing” the market of excessive use of exchanges’ leveraged capital. Such a situation creates favourable circumstances for the subsequent smooth growth of the chart with a sharp jump to a new historical high. At least this formula has worked well in the current bull cycle.


We believe that the activity of large investors does hint at a willingness of the market to move higher. However, it is important to consider here that the total amount of such people's savings is enormous. Not only are they not sitting in deficit, but they can afford to survive almost any drawdown. Because of this, less experienced and wealthy investors traditionally need to behave more cautiously - at the very least, this decision seems logical.


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