- Smaller wallets with less than 1 BTC are benefiting from the dip.
- BTC could fall below $36,000 if sellers continue to make profits.
After the storm comes, the calm is a popular saying, indicating respite in a turbulent situation. But for Bitcoin [BTC]the last 24 hours haven’t been the best of days.
At the time of writing, BTC changed hands at $38,375, marking a decline of 3.21% within the mentioned time frame.
According to a report from Santiment on November 17, the pullback could be related to widespread profit-taking in the market. The on-chain data provider also announced that addresses holding more than 100 BTC were the main culprits of the selling pressure.
However, smaller wallets with less than 1 BTC in their portfolio give Bitcoin the advantage of buying.
#Bitcoin‘s portfolios fluctuated during this big market-wide surge. Tons of new smaller wallets with less than 1 $BTC have flooded the network. Meanwhile, the 1-100 level has flattened out and the 100+ level may be in the midst of some profit taking. https://t.co/va51CcexC1 pic.twitter.com/PNZtA9ir2U
— Santiment (@santimentfeed) November 17, 2023
Big bets anyway
Given the inequality and impact between these cohorts, BTC has no choice but to slide.
However, Bitcoin’s decline does not appear to have had any impact on the price optimistic prejudices that traders have. AMBCrypto was able to derive this conclusion from the Estimated Leverage Ratio (ELR) metric on CryptoQuant.
The ELR shows how much lever market players use on average. When the benchmark falls, it means traders are being cautious about margin levels.
However, Bitcoin’s ELR had risen to 0.21 in the past 30 days.
Source: CryptoQuant
The increasing ELR trend suggests traders are using more of the 20x, 50x, and 100x leverage to bet on the BTC price action. AMBCrypto’s conclusion that most positions were long was due to the financing rate.
Funding rates show whether traders are bullish or bearish on a coin price. A positive financing rate indicates a bullish sentiment, while a negative rate indicates a bearish tone.
At the time of writing, Bitcoin’s funding rate was 0.006, confirming that traders expect the price to recover within a short time.
Source: Glassnode
Sellers are rebelling
Another metric to consider regarding the BTC price is the Exchange Net Position Change. This metric measures 30-day inventory on exchanges. At the time of writing, Bitcoin’s net position change on the exchange was 27,056.26.
This increase is possible tagged as a sign that investors are looking to sell cash on their Bitcoin holdings. Assuming the metric falls into the negative zone, this would be a sign that investors have decided to hold on.
If the Exchange Net Position Change remains positive in the coming days, BTC could fall from $36,000.
Source: Glassnode
Is your portfolio green? Check the BTC profit calculator
In conclusion, it is likely that Bitcoin has reached an overheated point for the time being. However, pullbacks are normal in long upward seasons as it is typically not a straight line to new highs.
Should intense accumulation return to the market, a move towards $38,000 could be next. But this may take some time, given market conditions at the time of writing.
The post Bitcoin: not all participants are bystanders when BTC falls appeared first on AMBCrypto.