- Bitcoin rebounded to $96k after dropping to $89k, with limited whale activity impacting momentum
- Key metrics, including open interest and whale transactions, underlines mixed signals for Bitcoin’s near-term outlook
Bitcoin (BTC) began the year with promising momentum, hitting a high of $102,000 on 07 January. However, this initial rally was short-lived as the cryptocurrency soon saw major corrections, falling below $100k soon after.
At the time of writing, Bitcoin was priced at $96,556, following a partial recovery from a dip to $89,000 earlier in the week. The price drop below $90,000 highlighted concerns among market participants, with some analysts delving into the underlying factors shaping this movement.
In fact, a CryptoQuant analyst noted the pattern of “stop hunting,” where price declines temporarily break key support levels before rebounding. Needless to say, this activity has raised questions about Bitcoin’s ability to sustain a trend reversal without the involvement of key market players.
Whale activity and market sentiment
CryptoQuant’s ‘analysis pointed to whale inactivity as a major contributor to Bitcoin’s limited recovery. The Coinbase Premium Gap (CPG) data highlighted significant selling activity by whale entities, but no corresponding buying action to absorb the drop.
Source: CryptoQuant
Typically, when whales step in to purchase Bitcoin during a decline, the market sees heightened volatility. However, this wasn’t the case during its latest price movement.
The analyst emphasized the importance of activity on major exchanges, particularly Binance, where whale participation often leaves traces in market-buy ratios.
In this instance, no evidence of substantial buying by Binance whales emerged, suggesting a cautious approach by large-scale investors. While the daily candle pattern indicated potential for a trend reversal, the lack of engagement from major players raises uncertainty about Bitcoin’s near-term trajectory.
Bitcoin’s metrics flash mixed signals
Beyond whale activity, other Bitcoin metrics shared additional insights into the asset’s performance.
For example – Open interest, a measure of the total number of outstanding derivative contracts, rose by 2.09% over the last 24 hours to $61.88 billion.
Source: Coinglass
This hike in Open Interest alluded to a renewed appetite for trading activity and could indicate more speculation about Bitcoin’s future price movements. Additionally, the Open Interest volume surged by 213.18% over the same period – A sign of heightened market engagement.
Meanwhile, data from IntoTheBlock highlighted fluctuations in whale transactions, defined as transfers exceeding $100,000. Over the past month, the number of these transactions fell from 26,000 on 16 December to 15,000 by 12 January.
Source: IntoTheBlock
However, there has been a notable rebound, with over 20,000 transactions recorded on 13 January. This resurgence in whale activity could mean renewed interest in Bitcoin among large investors, potentially influencing market momentum in the coming weeks.
