Bitcoin is nearing the euphoric $100,000 threshold, driven by whale accumulation. However, beyond this bullish trend, worrying signals are emerging, urging caution. Let's delve into the driving forces and potential risks for investors.
The activity of whales and institutions on the Bitcoin network has seen significant growth recently. Transactions of large value, exceeding $10 million, have surged by 183.45%. Those ranging between $1 and $10 million have also increased by 82.26%.
This remarkable surge in volumes traded by major market players reflects a renewed appetite for Bitcoin, fueling the current bullish momentum.
Meanwhile, Bitcoin outflows from exchange platforms remain substantial. Outflows amounting to $603.07 million outweigh the $435.99 million inflows, resulting in a net balance of approximately $167 million.
This phenomenon of draining liquidity from crypto exchanges is generally associated with accumulation trends, thus reducing immediate selling pressure on the market.
Despite these encouraging accumulation signs, on-chain valuation indicators emit more mixed signals.
On one hand, the MVRV Difference, which measures short-term holder profits, has dropped to 1.73%, indicating that few short-term investors have substantial unrealized gains – a generally favorable condition that limits the risks of massive profit taking.
However, the NVT (Network Value to Transactions) ratio has surged to 598.28, indicating that the network value is growing much faster than transaction volume. This raises questions about a possible overvaluation of Bitcoin relative to its actual usage.
Analysis of the liquidation map on Binance reveals the emergence of critical zones below the current Bitcoin price.
Between $90,000 and $93,000, a dense cluster of leveraged long positions is vulnerable to liquidation in case of price retracement. Conversely, above $95,000, massive liquidations of short positions begin to accumulate, especially around $97,000 and beyond.
Therefore, if Bitcoin manages to maintain its strength and push higher, it could trigger a short squeeze, thereby accelerating the bullish momentum. However, a drop below $93,000 could risk triggering a cascade of long liquidations.
Bitcoin’s bullish momentum is supported by strong whale accumulation, favorable supply dynamics, and sustained exchange outflows. However, network activity signals and a fragile liquidation landscape suggest that caution is still warranted.
If Bitcoin manages to defend the $94,000-$95,000 zone and avoid significant long liquidations, the path could then be open for an explosive surge beyond $97,000.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
DISCLAIMER
This article is for informational purposes only and should not be considered as investment advice. Trading cryptocurrencies involves risks, and it is important not to invest more than you can afford to lose.
InvestX is not responsible for the quality of the products or services presented on this page and cannot be held liable, directly or indirectly, for any damage or loss caused by the use of any product or service featured in this article. Investments in crypto assets are inherently risky; readers should conduct their own research before taking any action and invest only within their financial means. This article does not constitute investment advice.
Risk Warning : Trading financial instruments and/or cryptocurrencies carries a high level of risk, including the possibility of losing all or part of your investment. It may not be suitable for all investors. Cryptocurrency prices are highly volatile and can be influenced by external factors such as financial, regulatory, or political events. Margin trading increases financial risks.
CFDs (Contracts for Difference) are complex instruments with a high risk of rapid capital loss due to leverage. Between 74% and 89% of retail investor accounts lose money when trading CFDs. You should assess whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Before engaging in financial or cryptocurrency trading, you must be fully informed about the associated risks and fees, carefully evaluate your investment objectives, level of experience, and risk tolerance, and seek professional advice if needed. InvestX.fr and the InvestX application may provide general market commentary, which does not constitute investment advice and should not be interpreted as such. Please consult an independent financial advisor for any investment-related questions. InvestX.fr disclaims any liability for errors, misinvestments, inaccuracies, or omissions and does not guarantee the accuracy or completeness of the information, texts, graphics, links, or other materials provided.
Some of the partners featured on this site may not be regulated in your country. It is your responsibility to verify the compliance of these services with local regulations before using them.
