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13 May 2021

Bitcoin whale watching: This metric that called the 2017 top is now flashing red

Bitcoin whale watching: This metric that called the 2017 top is now flashing red


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This is probably not a coincidence as the turnaround takes place at a time when profit-taking in the market is close to its support line too.

The chart below shows that a break of the second support line in each bull market historically confirmed that the bull market top was in.

Not only is the aSOPR close to breaking the 7-month support, but there is also one major difference in the latest pattern of this metric that could be a cause of concern.

When looking at the profit-taking behavior of short-term holders (STH-SOPR) only, one could infer that this cohort of traders might almost be done selling.

In a bull market run-up, this is usually where a bottom in price could be expected as selling activity tends to decrease significantly.

Although this evidence suggests that the bull market top is likely not in yet, there is also no clear confirmation that sellers are done selling just yet.

The second price support level is the NVT (Network Value to Transactions Ratio) price, which is currently at $47,679 and is a major price support level in Bitcoin bull markets.

However, their selling activity is expected to significantly reduce over the next few days if current behavior stays in line with prior bull market sell-offs.

If that is not the case, the breakdown of the aSOPR 7-month support line is likely and could signal a trend shift from bullish to bearish selling.

Current price action is still above NVT price, which suggests that current price fluctuations are still within the expected bullish territory.

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cointelegraph.com
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