This has been the largest bitcoin sell-off since last April.
According to CryptoQuant, bitcoin could have a big price rally in mid-December.
The bitcoin (BTC) market experienced a shock when more than 728,000 units of the digital currency were sold, dragging its price from an all-time high near $100,000 to $90,000.
This sell-off, led by long-term bitcoin holders, left the market in a state of significant volatility.
According to signature data CryptoQuant research, long-term holders of bitcoin sold off BTC in the last 30 days, marking the largest sell-off since April of this year.
This recent massive sale reversed the previous behavior of the whales (the largest holders of bitcoin), who between June and October accumulated BTC, as seen in the following graph.
Long-term holders, commonly known as holdersare fundamental pieces in the dynamics of the bitcoin market. Their behavior directly influences price trends, providing investors with key clues for their strategic decisions.
With this settlement, The price of bitcoin was prevented from reaching the expected level of $100,000touching an all-time high of $99,300 last week before falling sharply. CriptoNoticias reported that as long as the existing supply fails to overcome traders and investors who take profits, BTC will remain below $100,000.
Binance and profit taking
One of the main destinations for these sales It was Binance, the largest cryptocurrency exchange in the world.
Since bitcoin broke its all-time high, Investors have been using Binance to make profits. This can be seen in the following graph.
Analysis of gains made by Binance users provides valuable insights into market sentiment.
Trading volumes on this platform, which are consistently the highest in the industry, have been a clear reflection of investor behavior.
For now, Profit taking seems to have slowedassures CryptoQuant. However, these types of metrics should always be watched closely as they offer key signals to anticipate potential changes in market momentum.
Market recovery
Despite the initial drop, bitcoin has shown signs of recovery, reaching a price on the current day of 96,000 dollars, As can be seen in the following graph of TradingView.
This rally, combined with the decline in bitcoin reserves on cryptocurrency exchanges, suggests the market could be going through a sustained bullish period, says CryptoQuant.
The firm assures that the current situation has similarities with the period from March to November 2020, when reserves on exchanges decreased significantly.
In December of that year, a surge in inflows into exchanges fueled upward buying pressure, sending bitcoin to a new high in a matter of weeks.
Some analysts suggest that current squeeze could be last correction before another big rally in the price of bitcoin.
What’s next for bitcoin?
According to the Chop Index, a technical indicator that assesses market volatility, bitcoin is in a consolidation stage, a phase that could precede a new significant increase, says CryptoQuant.
High values indicate a market with high volatility and little clear direction (a “chop» or range), while low values suggest a market with a clear upward or downward trend.
The following chart marks three key levels: “Full Tank”, “Chop on weekly needs” and “Empty Tank”. These levels can be interpreted as areas of high, medium and low volatility, respectively.
This index shows that the market is “worn” in terms of weekly volatility, which has historically been a sign that a bullish rally is near.
CryptoQuant has highlighted that, following previous cycles such as 2020, bitcoin could enter its next rally in the second half of Decemberafter a correction of approximately three weeks.
According to his analysis, The crypto asset points again towards the level of the $100,000as long as market conditions remain favorable.
Meanwhile, investors continue to closely watch whale movements and technical indicators, looking for clues as to whether bitcoin is ready to regain its bullish momentum or if the market could face another correction before a new all-time high.
