Chain factors acting as local pressure on Bitcoin

After Bitcoin reaches its all-time high of $ 69,000 on November 10, 2021, at the Bitstamp exchange rate, it has been in the clutches of bears that have managed to devalue BTC / USD. Dollar trading pair by almost 22%. On December 4, 2021, the price of BTC on most exchanges fell to $ 42,000; This broke the local bullish structure, causing a considerable number of people to doubt the bullish sentiment of Bitcoin traders. Currently, Bitcoin has been under pressure for 48 trading sessions, and various on-chain metrics indicate that the pressure may continue.

UTxO Profit Percentage (7DMA)

The meaning according to Glassnode Academy:

UTxO stands for “Unspent Transaction Exit”. A UTxO makes a profit if the current price is higher than the price when it was created. In contrast, a UTxO is at a loss if the current price is lower than the price when it was created. UTxO Percentage in Profit highlights the percentage of the total set of UTxO currently in profit. In general, higher values ​​can suggest market highs, while lower values ​​can indicate lows.

You can refer to the chart below:

UTxO profit percentage (7DMA). Source: CryptoQuant

The chart above uses a non-standard version of the UTxO profit percentage metric; An additional setup is applied to it in the form of a 7-day moving average for better signals. You can easily use this setting through the personal account of any blockchain data provider. Around November 18, 2021, the indicator curve broke its first support line (red line), which confirmed the thesis that Bitcoin reached its local peak in the range of $ 69,000-64,000.

Furthermore, the curve of the indicator fell into a transit zone, indicating Bitcoin’s weakness and loss of bullish momentum for some time. Finally, on December 3, 2021, the indicator curve broke its uptrend line, bringing traders huge losses as many long positions were liquidated. The indicator is also under a broken uptrend at the moment, indicating that Bitcoin is still weak and has not recovered.

Bitfinex exchange reserve (1h)

As you probably already know, the Bitfinex exchange has been associated with a lot of speculation on the Bitcoin exchange rate in the past. Bitfinex still contains large whales that continue to influence the Bitcoin exchange rate.

You can refer to the chart below:

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Reserve Bitfinex BTC (1h). Source: CryptoQuant

The chart uses the 1-hour BTC reserve, reflecting that since about December 9, 2021, many Bitcoins have been flowing into Bitfinex; In other words, it is a BTC entry. As a general rule, the entry of Bitcoins to exchanges is associated with the upcoming bearish corrections or at least associated with some expected events that cause uncertainty. The current values ​​of the tickets are very high, which may be due to the profit taking of the giant whales and the uncertainty around the US monetary policy.

Proportion of whales (72 h MA)

The Whale Ratio metric (72 h MA) reflects the force of pressure on your side. The lower the gauge value, the lower the pressure, and consequently the higher the gauge value, the higher the pressure. Two levels are used to determine pressure forces. The first pressure level is a line with a value of 0.85. The second pressure level is a line with a value of 0.90; These two values ​​indicate to traders a relationship of extreme pressure, which suggests a subsequent move to the downside. Since December 3, 2021, the proportion of whales has been between the indicated levels, which means high pressure.

You can refer to the chart below:

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Proportion of whales (72 h MA). Source: CryptoQuant

To sum it up, based on these chain indicators, we can say that retesting the $ 42,000-40,000 levels is not unreasonable. These on-chain metrics aren’t the only ones that indicate Bitcoin’s current weakness; For example, according to data from Santiment, whales have sold bitcoins for $ 1.8 billion recently and they are still being sold. At the same time, of course, we must understand that another round of decline in Bitcoin is nothing more than probability, and our task is to respond promptly.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice..


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