Bitcoin whale clusters show major resistance levels are at $10,570 and $11,288, raising the chances of a major sell-off.
Whale clusters form when whales accumulate Bitcoin and do not move the BTC. Areas that have large amounts of unspent BTC become an area of interest, typically a resistance level. Analysts at Whalemap explain:
“Bubbles show locations where unspent bitcoins were accumulated. The larger the bubble, the more unspent bitcoins are located there. P.s. Unspent means these bitcoins have not been moved since they were ‘inflowed’ to a whale wallet.”
Whales, or individuals holding large amounts of BTC, like to sell either at breakeven or at profit, depending on the market trend. If whales deem the current trend to be bearish, the $10,570 level could serve as an area where whales breakeven.
The two biggest whale clusters line up with technicals
Based on the recovery of Bitcoin above $10,000, some traders foresee BTC retesting the $11,000-$11,300 resistance range.
The strength of the $10,000 support level could allow BTC to retest $10,570, and potentially surpass it. For now, many traders appear to be cautiously optimistic, at least until the mid-$10,000.
Most short-term bullish and bearish cases also center around the $10,570 to $11,000 resistance range. A rejection from the range raises the probability of downside in the near future.
On-chain metrics swaying cautiously bearish
For now, several on-chain metrics are supporting the near-term bearish case for Bitcoin. Data from Glassnode, for example, shows BTC miner fee deposits to exchanges have increased to levels unseen since 2017. The researchers said:
“Currently, almost 10% of all #Bitcoin miner fees are spent on transactions that deposit $BTC to centralized exchanges. This is a 2x increase since the beginning of the year, and levels we haven't seen since late 2017.”
However, the rise in miner fees and the record-high hash rate of the Bitcoin blockchain network indicate an overall rise in network activity. But if miners sell the fees, then it could impose additional selling pressure on the BTC/USD pair.
Bitcoin fees are being sold on exchanges. Source: Glassnode