Bitcoin, the world’s largest cryptocurrency, has finally hit its record level since 2017; however, the digital asset rejected strongly near $20,000.
We all know that liquidity is the most critical factor for whales as well as high-net-worth investors. As they deal with massive orders, they need to measure the slippage their sell orders will cause.
The most efficient period for whales to sell without causing massive volatility is when peak euphoria in the market is met with great buyer demand.
Therefore, when the dominant cryptocurrency price hit its record high on Coinbase, the market sentiment has become highly bullish. After that, whales began to sell, causing large liquidations across major exchanges.
According to Ki-Young Ju, CryptoQuant CEO, whale withdrawals were slowing down on November 30. He announced that he knew enough exchange stablecoin reserves would hit $20,000 by this year. If ATH rejection occurs, it could be a massive pullback as whales would heavily sell the largest cryptocurrency.
The confluence of whales keeping Bitcoin on exchanges indicates higher selling pressure. The sell-off from miners expanded the dominant cryptocurrency’s downturn.
According to Ki, whales started to deposit Bitcoin into exchanges once again, which happens when whales want to sell their holdings.
Significantly, the dominant cryptocurrency’s price recovered quickly after declining to about $18,200. It increased to more than $19,400 in several hours.
The quick rebound likely happened due to the nature of the decline. As the price decreased, exchanges witnessed cascading long liquidations. Bitcoin probably fell harder than it should have if it were not for the large liquidations.
Bitcoin could witness two essential scenarios
Significantly, the world’s largest cryptocurrency could witness two essential scenarios in the near term:
1) Bitcoin could consolidate more than $19,000, which would enable the derivatives market to find composure and the open interest to restore.
2) It could continue to fall as traders anticipate a blow-off top after reaching a record level.
However, it has to be mentioned that the macro outlook on Bitcoin remains highly positive. Scott Melker, a cryptocurrency trader, indicated that the monthly candle for November closed at Bitcoin’s all-time high. That has shown a positive long-term picture for the dominant cryptocurrency.
Furthermore, BTC’s key support levels in the near term are $18,200, $17,700, and $16,200. Besides, there are still large whale clusters in these areas, which could provoke buyers’ reactions.