What This Bitcoin Divergence Could Hint About BTC’s Price


Bitcoin is heading to the downside on lower time frames and appears to indicate future losses. The number one cryptocurrency by market capitalization posted a 3% loss last week, but there is a potential sign of hope for the bulls.

Related reading | Why can Ethereum trade for $500 if these conditions are met

At the time of writing, Bitcoin (BTC) is trading at $20,000 with a 1% loss in the last 24 hours.

Bitcoin BTC BTCUSD
BTC trends to the downside on the 4 hour chart. source: BTCUSD TradingView

As pointed out by a pseudonymous trader, Bitcoin whales are currently buying BTC price action and could hint at a future volatility retracement. The trader used the data provided by Material Indicators to show what different investor classes are doing as BTC records losses.

As shown below, investors with buy orders around $100,000 (in purple in the chart below) have increased their buying pressure as almost every other and smaller investor class sells out in this price action. This divergence could signal a bounce because these BTC whales often anticipate or create price trends. pseudonym dealer explained:

Whales (purple) are buying in the market while the price of #Bitcoin is fixed. Historically, purple has been the most important category for future price action. Clear divergence, hopefully it will happen this time.

Bitcoin whales (brown in the chart) also saw a slight increase in bids as BTC returned to the around $20,000 area. This class of investors has been mostly dormant in the current market environment, but their recent post highlights the importance of the current levels of BTC.

Bitcoin BTC BTCUSD 1 MI
Bitcoin whales (purple and brown on the chart) are buying bitcoins at the current PA. Source: Material Indicators

In this sense, Material Indicators are posting huge bid orders for the price of BTC around this region from $19,900 to $20,000. There is more than $20 million in solicitation at these levels alone with an additional $6 million at about $19,500, and over $10 from $19,000 to $19,000.

In other words, there appears to be enough liquidity for Bitcoin to maintain its current levels for the time being.

Bitcoin BTC BTCUSD 2 MI
BTC price with important support levels (yellow and red blocks below the price) on lower time frames. Source: Material Indicators

Can Bitcoin Bulls Record a Monthly Green Candle

On the higher time frames, additional data provided by Material Indicators records a significant liquidity area between $17,000 and $20,000. Large market participants can try to push the price down to meet these orders which may hinder bulls’ attempts to salvage the monthly candle.

The analysts from Material Indicators wrote:

Bulls are defending the 2017 top, but with one day left it will be nearly impossible to print a green monthly candle. There is still a chance for green in the weekly. Expect fluctuations. One way or another, Bitcoin will break or crash very soon.

Related reading | The Intense Fear Still Lives: Getting Back Beyond the Crypto Market Panic

Analysts anticipate a possible relief in the coming days after a possible retest of annual lows. Any bullish thesis will be invalidated if BTC loses $17,500.





Leave a Comment

Your email address will not be published.