Is $20,000 just around the Corner as Bitcoin Selling Pressure Growing Slowly?

Photo by Pierre Borthiry on Unsplash

Although bitcoin has continued to rise sharply over the past week, exchange giants and miners have not reacted violently, and the market’s “calmness” has been the best aid to bitcoin’s continued strength.

Bitcoin has been rising over the past week as traditional financial institutions have become actively involved in cryptocurrency transactions. With a one-day rise of $3,200 on The 14th and a weekly rise of 20 percent as high as $19,400 yesterday and no sign of whales or miners selling so far in the market, it seems there is still more room for bitcoin to rise.

From the perspective of market supply and demand, judging the movements of miners is considered to be a critical data on-chain in the early stages of a bull market. Since the advent of Bitcoin, most of the selling behavior of miners has led to a significant drop in price. Usually, after the bull market starts, miners will gradually increase their efforts to sell bitcoin, and when it reaches the price peaks and starts to fall back, the amount of selling will gradually decrease again.

In order to better identify the movements of miners in the market, CryptoQuant created the Miners’ Position Index (MPI), which counts the total amount of bitcoin transferred out of the wallets of major miners around the world. A look at the last 30-day average of this indicator shows that there are no obvious signs of recent concentrated selling by miners, and the volume of transfers has remained above the medium- to the long-term average.

Miners’ Position Index (MPI)

Likewise, the recent on-chain transfers of giant whales have been relatively small, so it can be expected that the price will probably not drop significantly in the short term.

Exchange Whale Ratio (90-day MA)

The percentage of the whale in the trade can be viewed from various perspectives depending on the criteria, for example, looking at the real-time percentage requires a short time dimension, but by looking at the 72-hour MA in the chart below, it can be seen that if the indicator stays below 85%, the price will remain stable.

Exchange Whale Ratio (72h MA )

As the chart shows, the price of bitcoin is likely to fall sharply and quickly once the indicator breaks 85%, which it did a week ago, and recently dropped to about 79% (back in the relatively “safe” zone).

In addition to CryptoQuant, many analysts have also thrown out a continued bullish analysis of bitcoin. Citing CryptoQuant data, Cole Garner, one of the leading cryptocurrency analysts in the U.S., noted on the 21st that the bitcoin balance on exchanges is gradually decreasing and that the decline in bitcoin liquidity is driving up its price.

Exchange Stablecoins Ratio for BTC

This indicator is calculated by dividing the total number of bitcoins on the exchange by the total number of stablecoins. Simply put, the higher the percentage of stablecoins held on the exchange, the lower the value of this indicator, while a lower value means that the selling pressure in the market is relatively weak, which can be considered a very effective buy signal.

The total number of stablecoins deposited on exchanges has risen significantly over the past few months, resulting in a relatively low level of potential selling pressure since September, and although the current selling pressure has increased slightly, the odds of a significant decline are not high due to the persistently low percentage of the market represented by the aforementioned giant whale. Therefore, according to CryptoQuant, Bitcoin is likely to break out of its all-time highs this year and to reach the $20,000.

Article from CryptoQuant

Translated by Yang(Mengyan Finance)

To translate some latest policy and issues on blockchain and fintech happened in China