Analysts Warn of Potential Bitcoin Decline Amid High Whale Exchange Deposits
Bitcoin deposits from large holders surged, suggesting further downside potential for the cryptocurrency according to analysts.
Continued selling pressure from Bitcoin whales may cause further declines in the cryptocurrency’s value. Analysts from CryptoQuant report that Bitcoin deposits on exchanges peaked at 9,000 BTC on November 21, coinciding with a drop in its price to $80,600 on Coinbase, marking a seven-month low. High inflows often suggest that investors are preparing to sell, which raises concerns about Bitcoin’s stability.
“This indicates that investors and traders continue to sell Bitcoin in the context of the current price drawdown, putting further downward pressure on the price.”
This phenomenon has pushed the average deposit size to 1.23 BTC in November, the highest level seen in the past year.
Exchanges have been experiencing increased BTC deposits recently. Source: CryptoQuant
Binance’s Stablecoin Reserves Reach Record
CryptoQuant has also highlighted that the stablecoin reserves on Binance have surged to a record $51 billion, the highest ever. Inflows of Bitcoin and Ether have reached $40 billion this week, led by Binance and Coinbase. Elevated stablecoin reserves typically indicate a transition from cryptocurrencies to dollar-pegged assets until investors decide to re-engage with the market.
Earlier, analyst James Check pointed out the remaining leverage in the market. “We wouldn’t be too surprised if we wick into the $70k-$80k zone to flush the final leverage pockets,” he indicated.
Meanwhile, BitMine’s chairman Tom Lee has adjusted his Bitcoin price target from $250,000, now stating that hitting an all-time high by the year’s end is merely a possibility.
Similar Trends in Ether and Altcoins
CryptoQuant has noted that a comparable inflow pattern is observable for Ether, although not to the same extent. The sell-off has also impacted other altcoins, bringing many back to bear market lows. Additionally, 10x Research mentioned that Bitcoin’s recent oversold rebound is expected to continue, with $92,000 and $101,000 as critical resistance levels to monitor. Bitcoin had recently reclaimed $90,000 and was trading slightly above at the time of writing.
