Whales Depositing Bitcoin to Exchanges; Another Pump Expected Before A ‘Bigger Flush’
Bitcoin is on a decline today. The drop in Bitcoin’s price started yesterday when the digital asset traded to as high as $37,950. From here, BTC fell about 10.7% to near $33,890.
As of writing, BTC/USD has found its way to $35,000, but it is to be seen if we will see another decline and revisit the $30k level. According to TraderSZ, breaking the $30k level could take us to $27,650, and the breach of $38,000 can provide us an opportunity to $42k.
As for Ethereum, which hit its all-time high just yesterday and since then has been falling in tandem with Bitcoin, things can get “ugly” if $1,160 is breached, said TraderSZ. Currently, ETH/USD is trading around $1,290 after going down to $1,234.
Another trader Jonny Moe sees a pop back up one more time before Bitcoin sees a “bigger flush” that could take us to $27k.
The latest decline in prices came following Bitcoin being deposited in cryptocurrency exchanges.
In the past 24 hours, 3,450 BTC has moved to exchanges with the biggest deposits of 2,320 BTC made to Binance, as per data source Viewbase. In the past 7-days, 6,738 BTC was moved on Bitfinex, 2,576 on Huobi, and 1,124 on Poloniex.
“No doubt it'll hit $100k this year, but in the short-term, if we wouldn't see any significant buying pressure from CoinbasePro, I think BTC would be bearish,” said Ki-Young Ju, CEO of Crypto Quant.
On Tuesday, Treasury Secretary-nominee Janet Yellen told the Senate Finance Committee that “cryptocurrencies are of particular concern.” She further said that,
“many are used, at least in a transaction sense, mainly for illicit financing. And I think we really need to examine ways in which we can curtail their use.”
This could have played some part in the drop in prices as well.
Still, on February 26, 2021, Bitcoin options contracts with a strike price of $36,000 put were bought in good size. But at the same time, it is worth remembering the huge open interest (OI) at $52k Bitcoin calls strike are expiring at the end of the month for Bitcoin.
Another key factor here is the US earnings season, which will provide retail market participants “a raft of trading opportunities,” wrote Denis Vinokourov of Bequant. But at the same time, “this may lead to some market participants re-allocating capital and other resources to trade other assets.”
Moreover, besides making negative remarks on cryptocurrencies, Yellen also called to “act big” when it comes to stimulus, adding that the rescue package is “a high priority.” She further said that interest rates that are at historical lows would remain this low for a long time.
And dovish Yellen means good things for risky assets, which translates to higher prices for Bitcoin and the broad cryptocurrency market.