Bitcoin’s price has lost its $ 18,000 support level, but several groups of whales below it suggest that the drop will be aggressively bought.
The price of Bitcoin (BTC) fell below the $ 18,000 support level on November 22. This is after the BTC continuously recorded high over-the-counter (OTC) and institutional volumes throughout November.
Hourly chart of BTC / USD.
The data suggests that rising institutional demand was probably one of the main catalysts behind the rise in BTC prices to $ 18,965.
According to Skew data, Grayscale’s Bitcoin Superstar scam volume at OTC Markets increased significantly in the fourth quarter.
OTC Markets is a stock exchange in the USA that allows institutional and accredited investors to buy various securities. Grayscale’s Bitcoin Trust trades on OTC Markets, similar to an exchange traded fund (ETF).
Daily volume of the Grayscale Bitcoin Trust.
This is one of Bitcoin pulled by institutions
There is a clear difference between the ongoing bullish trend and the 2017 bullish one. This time, Bitcoin showed more composure and stability throughout the bullish trend, consecutively recovering the main resistance levels.
Bitcoin saw a large increase in spot volume, open futures exchange contracts and institutional demand. However, several metrics, such as Google Trends, have shown that mainstream interest in Bitcoin is relatively low.
The combination of the two factors mentioned above suggests that institutions were probably the main driving force behind the recent rise.
The strong involvement of institutions in a prolonged Bitcoin recovery is optimistic because the institutions are likely to accumulate BTC with a long-term strategy.
This trend explains why most of the big falls that Bitcoin suffered in November were bought aggressively. As reported by Cointelegraph, Dan Tapiero, the co-founder of 10T Holdings, said „the big guys are going to buy the dives now“.
Tapiero also emphasized that real fundamentals are driving the ongoing bull, unlike the 2017 craze. He said:
„The 3rd wave makes the 2017 movement dwarf and it should persist for several years.“
Michael Novogratz, the billionaire Bitcoin investor, also said that Bitcoin has become an institutional asset over the years.
In recent months, more institutions, hedge funds and investment banks have started to compare BTC to gold. Novogratz said on CNBC:
“Bitcoin is now an institutional asset. Score. The good thing is that most institutions have not yet arrived. That’s why 2021 will be as good or better than 2020 ”.
3 groups of whales to watch as BTC falls below $ 18,000
Whales, or high-net worth investors, typically use OTC and exchanges simultaneously to accumulate Bitcoin.
Throughout November, analysts at on-chain analytics firm Whalemap discovered the emergence of large whale clusters.
Whale clusters are price levels at which whales buy BTC and do not move their properties. Clusters usually mean areas where whales buy Bitcoin.
Clusters of Bitcoin whales throughout November. Source: Whalemap
Whalemap data shows that $ 16,411, $ 16,278 and $ 15,691 remain as the big whale clusters. Therefore, even though the BTC has a short-term setback, the aggressive accumulation of whales in November established crucial areas of support.
In the short term, following the recent BTC correction from $ 18,865 to less than $ 18,000, whale clusters are expected to act as important levels of support. Price levels of $ 17,300 and $ 16,411 remain the main support levels.