Bitcoin failed to hold its recent all-time high of $61,950 and fell below the $60,000 mark. At the current time, the popular coin stands at around $55,000 — a decrease of almost ten percent.
However, there is no reason to be concerned. On-chain analysts assume that the upward trend will also determine the future. Thus, it’s quite clear that a Bitcoin rally is picking up speed again.
Bitcoin Whales Cause Price Falls with Profit-Taking
The current high liquidity, as well as great interest in the Bitcoin market, are attractive signals for BTC whales and institutions to take profits from their investments. Whenever crypto exchanges can record a large inflow of Bitcoin, it indicates a further sale. Bitcoin whales and institutions often deposit before they sell. This behavior can be observed in the Asian market in particular. Huge Bitcoin inflows have recently taken place on the South Korean crypto exchange Bithumb.
According to analysts, the Bitcoin futures market also played a role in the current decrease. Accordingly, a so-called ‘funding mechanism’ ensured that many short sales took place. This mechanism is intended to provide equilibrium when the number of traders with long positions predominates. Short sellers are then encouraged to take short positions. This fact ensures a high refinancing rate, which makes it unattractive for traders to buy Bitcoin due to high-interest rates.
Conclusion: Bitcoin Rally Continues to Pick up Speed!
Interest in Bitcoin continues to rise with each new all-time high. Although a crowded market and high funding rates are pushing the price down, the entry of new capital into the crypto market could further boost Bitcoin’s momentum. Institutions, in particular, turn out to be major sponsors that allow the market to reach further milestones.
Bullish signals are coming from all directions, pointing to a new rally. Perhaps one can speak of $100K+ at this point.