A Bitcoin whale placed a $100 million short on Nov. 15 after various on-chain data hints at a whale-induced BTC sell-off throughout the past week.
Though the momentum of Bitcoin remains strong, there are many reasons that make $16,000 an attractive area for sellers.
There is significant liquidity at $16,000, primarily because it is a heavy resistance level. But the level has seen relatively high buyer demand, stablecoin inflows show. Hence, the battle between buyers and sellers at $16K makes it an area with high liquidity, which is compelling for sellers.Bitcoin orderbook on futures exchanges. Source: CL, Exocharts
A seller aggressively sold Bitcoin on Bybit on Nov. 15. Order flows show that there were sell orders worth around $3.5 million on average consecutively over several hours.
Based on the abrupt large-scale sell order, CL suggested that this may result in two scenarios.
First, the seller could get engulfed and cause a squeeze, which might cause the BTC price to increase. Second, it could continue to apply selling pressure on BTC. The trader wrote:
“Approx 2 hours ago, someone aggressive sold almost ~100M on Bybit, a 3rd of the sells are opens, personally pretty curious to see what happens if this seller/shorter does get engulfed, or if he is let free.”
Meanwhile, other major exchanges have spotted large deposits over the last 24 hours. United States-based cryptocurrency exchange Gemini saw a 9,000 BTC deposit, according to the data from CryptoQuant.Gemini BTC inflow mean. Source: CryptoQuant
Whales typically utilize exchanges with strict compliance and strong regulatory measures, which include platforms like Coinbase and Gemini.
Considering the large Bitcoin deposit into Gemini, which is worth $143 million, a pseudonymous researcher known as “Blackbeard” said it is time to be cautious.
As CL noted, Bitcoin’s current market structure is different from the previous cycle. For instance, when BTC was at $16,000 in 2017, the market was extremely overheated with extreme volatility. The trader said:
“Back in 2017, when we pumped from 10k, 15, into 20k, we had OKEx weekly futures trade in 1000$ contangos, now we're here with quarterlies only 100$ above.”
This time around, the rally appears to be more sustainable and gradual. Bitcoin has continued to see a staircase-like rally over the past six months, which has allowed it to evolve into a prolonged uptrend.
Rather than a sudden spike followed by another steep uptrend, BTC has seen upside followed by consolidation, and so on.
As Cointelegraph reported earlier this month, various data, including Google Trends, show there is still little interest from retail investors unlike in late 2017. On the other hand, there is increasing evidence that Wall Street is starting to take notice.
Hence, there is a strong argument to be made that the ongoing rally is fundamentally different from 2017 despite the current "extreme greed" market sentiment. Notably, the available supply has decreased due to the recent halving, as well as dwindling reserves on exchanges over the past year.
The Bitcoin futures funding rates are also neutral at around 0.01%, which means the market is not as overheated or overcrowded as it was three years ago. This trend could make the downside limited, especially in the medium term.