Bitcoin (
$110,171.00 ) proponents and investors are (understandably) calling for a ‘supercycle,’ with predictions of the world’s largest cryptocurrency by market cap reaching as high as $1 million in certain circles.
But that party could be spoiled if one technical indicator is to be considered. “$BTC Exchange Whale Ratio(72h MA) reached 90%,” warned Ki-Young Ju, the founder of crypto analytics tools CryptoQuant, in a tweet today.
He added, “It’s highest since Feb 2020 before the mass-dumping. Don’t take too much leverage on your longs. Be careful.”
$BTC Exchange Whale Ratio(72h MA) reached 90%.
It’s highest since Feb 2020 before the mass-dumping. Don’t take too much leverage on your longs. Be careful.
Chart 👉 https://t.co/t3orEMC7sC pic.twitter.com/vynh5ArB9I
— Ki Young Ju 주기영 (@ki_young_ju) August 10, 2021
What’s the whale dumping tool?
As per CryptoQuant, the so-called ‘Whale Dumping’ is a measure of deposits from some of the largest holders of Bitcoin ( $110,171.00 ) —colloquially known as ‘whales’ in financial circles.
Such holders are usually secretive about their trades and their identity is oft-unknown, but tracking what whale wallets helps provide information on what large holders of Bitcoin ( $110,171.00 ) and other cryptocurrencies are doing and how their trades could impact the market.
Two indicators are used by CryptoQuant to check how whales dump their coins: 1. An ‘All Exchanges Inflow Mean (24h MA)’ tool that calculates the average amount of Bitcoin ( $110,171.00 ) deposits to all crypto exchanges, and 2. an Exchange Whale Ratio tool, which calculates the top 10 inflow transactions to total inflows.
The latter indicator is said to flash a ratio above 85% when prices shoot upwards in a ‘fakeout’ or precede a dump. “In the bull market, it often keeps below 85%. On the other hand, in the bear market or fake bull for a mass-dumping, it usually keeps above 85%,” explains the CryptoQuant blog.
Where’s Bitcoin ( $110,171.00 ) on that chart now?
As the below image shows, Bitcoin ( $110,171.00 ) ’s ‘Exchange Whale Ratio’ sits on a 0.90 level at press time, signifying conditions ripe for ‘mass dumping,’ as per CryptoQuant.
Image: CryptoQuant.
Bitcoin ( $110,171.00 ) saw sudden drops on several instances the last time such levels were reached. In March 2020, when BTC fell to below $4,000 for several hours, the tool reached a high of 0.90. The tool stayed above 0.85 even earlier in November 2018, when Bitcoin ( $110,171.00 ) fell from above $6,000 to under $3,900.
Bitcoin ( $110,171.00 ) trades above $45,000 for now and is up nearly 15% in the past few days alone. But seeing the resistance there is at the $46,000 level, could the Whale Dumping tool prove correct? Only time can tell.
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