Bitcoin has recently increased in value. It slowly seems to be approaching its historical high, but some analysts agree that the $12,000 to $14,000 range is a key area for Bitcoin in the short term, especially when it comes to the action of Bitcoin whales in a possible BTC rally.
In this article we will take as a reference the analysis made by David Puell. He took as a reference the last Bitcoin cycle in the last four years.
Bitcoin price (BTC) starts the week off on the right foot
What role do Bitcoin whales play in this bullish rally?
According to Puell, the whales were major buyers of Bitcoin while it was in the $9,000 to $12,000 range. So those Bitcoin whales that bought BTC at $9,000 are making relatively high profits right now. Likewise, those that bought while it was a little higher are now at break-even point.
What would Bitcoin whales do in the face of a possible BTC rally? Especially if it goes above $12,000 and $14,000.
So, if Bitcoin takes off above this level, we’ll see many of these whales selling their currencies to make a profit in the short term. All of this leads us to wonder what these buyers might do by the time Bitcoin takes off.
Some people suggest that it’s more profitable for them to let Bitcoin continue its bullish run. But others suggest that they will simply sell and a price correction will occur.
What arguments do you have at this point?
According to Puell’s study, the data supports arguments for both a reversal and a continuation of the rally.
For example, if the whales bought at $9,000 and $12,000, they may want to make a profit if Bitcoin rises above these levels. They have waited a long time for this, after a rather static June and part of July in terms of significant price movements.
However, if the whales are profitable and at the break-even point right now, it may be better for them to let the rally go on. Puell said he expects a build-up phase to occur in the region from US$10,000 after the BTC move to US$12,000 or US$14,000. This is in case a correction occurs before the rally continues.
In addition, at CryptTrend we have been constantly monitoring the activity of Bitcoin whales. With this we can also support some of Puell’s conclusions, because since the beginning of August, when BTC finally broke the US$ 10,000 barrier, the Bitcoin accumulation shot up.
However, Puell made sure to establish that it is the current context of the Bitcoin market that has set the tone for 2020, unlike the cycles he compared it to. In this context, the protagonist is the COVID-19 pandemic and the effects it has had.
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In view of the special market conditions this year, the consequences cannot be guaranteed to be normal either. Puell therefore warns that the market structures in this Bitcoin Trader cycle can be quite distinctive.
But this does not mean that we are blind in the field. On the contrary, there are some indicators or variables that can give us a clue to possible Bitcoin scenarios in the short and medium term.
For example, you can always take a look at the correlation index of Bitcoin’s price with other assets such as gold or traditional stocks.
Also, you can’t neglect to keep track of fiscal measures being taken around the world, especially in the last months of the year. And finally, we invite you to keep up with our summaries of crypto whale activities by using Whale Alert.