Bitcoin, the largest cryptocurrency by market capitalization, has captivated the attention of crypto enthusiasts as it demonstrates bullish momentum, aiming to reach the $66,000 level. Despite this newfound strength, whale investors have resumed shorting BTC, raising concerns about a potential price decline.
Are Bitcoin Whales Betting Against A Rally?
Alphractal, an advanced investment data analysis platform, has identified a bearish trend among whale investors in BTC through recent research. The platform observed this negative development by analyzing the Whale Position Sentiment metric for Bitcoin.
According to Alphractal’s findings, the Bitcoin Whale Position Sentiment measure has shown a significant shift, indicating that whales have started shorting again as the cryptocurrency surpasses the $64,800 price level. Although the market generally trends positively, this uptick in whale shorting activity suggests a more cautious approach, potentially exerting short-term pressure on Bitcoin’s price.
The Bitcoin Whale Position Sentiment metric is a “powerful indicator” that tracks the direction of positions leveraged by whales across various exchanges. An increase in this metric signals a rise in long positions, while a decline indicates a surge in short positions.
With one of the strongest correlations between this metric and price action, it is evident that whales continually dominate and control the market. Whale position sentiment, derived from the largest trades made throughout the day or hour on all exchanges, combines this data with broader positions to provide a powerful sentiment oscillator.
Considering this development, Alphractal highlighted that Bitcoin needs to stay above the $62,200 level, known as the Short-Term Holder Realized Price. A break below this level could transition the crypto asset into bearish territory.
Biggest Liquidity Pool Remains Below $40,000
Alphractal also noted that in recent days, BTC traders have predominantly held short positions, according to data from aggregated liquidation levels across multiple exchanges. This dominance by short positions has led to substantial liquidation pools above the current price.
Currently, a significant portion of the short positions has already been sold as the price exceeded $65,000. Furthermore, the primary liquidation pool in the short term is now positioned at $57,000.
While this development has triggered significant liquidations, there are still positions in regions between $67,000 and $71,000 that have not been liquidated over the past 90 days. However, from a 1-year outlook, Alphractal identified that the largest liquidity pool is located below the $40,000 level.
Despite this rise in shorting positions, BTC is displaying healthy price action, holding above $65,000 with an over 3% increase in the past day. In broader time frames like the 1-week and 1-month views, the digital asset continues its upward movement, rising by about 3.40% and 9.14% respectively.
