Whale Activity and Exchange Inflows Signal Selling Pressure
CryptoQuant analysts have issued a warning that continued selling pressure from Bitcoin whales could lead to further price declines for the asset. On November 21st, exchange inflows reached a peak of 9,000 Bitcoin, coinciding with the price dropping to $80,600 on Coinbase, its lowest point in seven months.
The analysis revealed that large deposits, specifically those of 100 Bitcoin or more, constituted 45% of the total coins sent to exchanges. This significant volume, with the whale cohort sending as much as 7,000 Bitcoin to exchanges on a single day, strongly indicates preparations for selling.
Investors and traders are actively selling Bitcoin during the current price drawdown, which is exerting additional downward pressure on the asset, according to the analytics firm. The average Bitcoin deposit value in November rose to 1.23 Bitcoin, marking the highest level observed in the past year.
Stablecoin Reserves Hit Record Highs
CryptoQuant also noted on Wednesday that stablecoin reserves held on exchanges have reached a record high of $51 billion, the highest in the platform's history. This week, Bitcoin and Ethereum inflows climbed to $40 billion, with a substantial portion of this volume passing through two leading exchanges.
The high level of stablecoin reserves on exchanges suggests a rotation of capital from Bitcoin and altcoins into dollar-pegged assets. This capital often remains in these stable assets until market participants are ready to re-enter the market.
Market Leverage and Price Targets
Earlier in the week, analyst James Check highlighted that leverage still remained in the markets, indicating it had yet to be fully flushed out. He suggested that a price movement into the $70,000 to $80,000 zone to clear these final leverage pockets would not be unexpected.
In their analysis, 10x Research stated earlier this week that Bitcoin's tactical, oversold rebound is still in progress. The firm identified $92,000 and $101,000 as key resistance zones for the asset to watch. At the time of writing, Bitcoin had reclaimed the $90,000 level and was trading slightly above it.
Tom Lee, chairman of BitMine, has adjusted his previous $250,000 Bitcoin price target, indicating that even reaching an all-time high by the end of the year is now uncertain. The analytics platform also observed a similar trend of deposit exchange inflows for Ethereum, although the total inflows for Ethereum have not seen as significant a spike.
Altcoin Performance Amidst Sell-Off
Inflows of other altcoins to exchanges have increased this month as the broader sell-off intensified. Many altcoin tokens have been pushed back to bear market lows during this downturn.