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Whale raised bitcoin by $ 5.5 billion as soon as BTC price fell below 36 thousand dollars

The flow of negative regulatory news related to bitcoin (BTC) and cryptocurrency has not stopped for the past few weeks.

Today’s ‘FUD’ news which failed to cite any action and only refreshes old information has come from China. A statement from the Chinese government revealed plans to “act on bitcoin mining and trading behavior”.

While retail traders are easily intimidated by this type of news, whales and market makers know how to spot a shopping opportunity, which was a case of $ 36,200 for today’s slump.

China banned bitcoin trading in 2017 …

The minutes of the Chinese Financial Stability and Development Committee presented general guidelines on a range of issues, including reforms in mid-sized financial institutions and tightening the scope for illegal securities activities. Therefore, it was not a targeted attack on bitcoin, nor was it any different from the actions and discourse of previous years.

On May 18, trade associations under the People’s Bank of China warned financial institutions and other member organizations not to engage in crypto trading transactions.

However, crypto trading in China has been banned since September 2017 and concerns about the carbon emissions of bitcoin mining operations were expressed by Chinese state media Pengpai three weeks ago.

Even market-making platforms have been targeted by Chinese authorities since 2018. Some crypto trading sites continue to operate illegally in the country, but most were identified and closed by authorities in 2019.

Derivatives Indicator Signal Accumulation

OKEx’s top merchant BTCs are in a long-to-short ratio. Source: Bybt

The data provided by the exchange sheds light on the long-term net position of traders. By analyzing the position of each client on permanent and futures contracts, one can get a clear view of whether professional traders are leaning towards a boom or a downturn.

Whales and market makers at OKX reached 1.08 long-to-short ratio in the early hours of May 21, giving the long 8% increase. It is worth noting that this level was the lowest in 30 days, indicating a lack of conviction. However, these pro traders entered the day in a bullish position, as bitcoin fell below $ 37,000, favoring the long-term by 62%.

Volume spikes confirm the theory

Trading volume is the best indicator to confirm whale activity, and those peaks must match the price below. Even if every trade has a buyer and a seller, there can be extreme volatility at low trading volumes, so it does not necessarily involve pro traders.

Total Bitcoin Spot Volume. Source: Coinalyze.net

Looking at the above figures, there should be no doubt that whales and market makers aggressively bought a drop of $ 36,200 on May 21. Spot exchange volumes exceeded $ 5.6 billion in four hours, which is also extreme for a 12% price movement.

To put things in perspective, the daily average volume over the past one month is $ 11 billion. Therefore, by combining this data with long-to-short derivative exchanges, one must assume that some heavy players were brave enough to buy today’s declines.

While no one can accurately predict that $ 35,200 will be held over the weekend, one should expect those heavy hands to maintain their position for a very long time.

The views and opinions expressed here are only those of Author And do not necessarily reflect the views of Cointegraf. Every investment and business move involves risk. You should do your research yourself while making the decision.

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