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Bitcoin whales contribute 90% of the money flow to the exchanges, how can we follow and make a profit?

The world’s largest cryptocurrency has fluctuated from $ 47,000 to around $ 46,000 after multiple failures. On Wednesday, it plunged to $ 43,000 and broke several moving averages. Bitcoin is finally making some big strides and we can assume that the next few days will be very volatile.

Bitcoin whales contribute 90% of the flow of money in exchanges

Institutional investors have raced into the crypto markets since late 2020 and contributed to the crypto boom in 2021. According to the latest data from CryptoQuant, the “Exchange Whale Ratio” is an indicator that the number of top 10 transactions compared to total inflows from exchanges has reached 0.9. This suggests that the top 10 trades accounted for about 90% of the total inflow on the exchanges, meaning that recent inflow activity is highly aggregated.

Bitcoin whales make up a high proportion of the investment, this is not new to the market. But when this indicator hits such a high ratio it could very well mean that we should prepare for some sell-offs as investors usually move their bitcoins into barter when planning a sale. In fact, the ratio has been increasing in recent months, which coincides with Bitcoin’s declining trend. This could also explain the sharp sell-off we saw on Wednesday. If this indicator stays high, the market would be vulnerable to violent movement.

More painful pumps on the way?

The Bitcoin market could soon be hit by a painful sell-off. On-chain data showed that a week ago a very old Bitcoin address was activated and 170,031 BTC were transferred from the address. This address contains a total of 500 BTC and has not been activated for 10.5 years. Some speculated that the address owner wanted to take profits in the face of recent market weakness. The sudden move in address raised concerns in the market as to whether this was a sign of a sell-off. While an address that is selling a significant amount of BTC may not have a huge impact on the market, it certainly affects market sentiment – which has been bearish and fearful lately. However, traders are advised to watch the market closely and prepare for volatility.

MicroStrategy buys 1,914 BTC – is it time to buy the dip?

Amid declining market sentiment, MicroStrategy shows great confidence in Bitcoin, buying 1,914 BTC at an average price of around $ 49,229 per bitcoin. The company currently holds approximately 124,391 bitcoins at an average purchase price of approximately $ 30,159 per bitcoin. Although Bitcoin suffered significant losses from its crash from its all-time high, the company still made $ 2.16 billion from its Bitcoin holdings.

“We believe Bitcoin is a great long-term investment for shareholders,” said CEO Michael Saylor. The company commented that it is considering making a return on its inventory and one way to do that would be by giving out Bitcoin. The inclusion of Bitcoin in company portfolios is common for large companies to hedge against risks. Billionaire investor Ray Dalio advised investors to spend 2% of their money buying Bitcoin.

How do you prepare for market fluctuations?

It seems that the next few weeks are going to be challenging and wild for Bitcoin. In times of uncertainty, a great way to survive is to diversify our strategies and portfolios. It is important to find out your risk tolerance and only invest money that you can afford to lose. Here are two options worth considering.

Option 1: A wallet for merchants and HODLers

An interest wallet is a safe haven to store your bitcoins. With up to 21% annualized interest, you can grow your wealth without taking the risks of trading. You can withdraw your deposit at any time or transfer the bitcoins to the trading account immediately.

Option 2: manage trading with less risk

Futures trading enables traders to make profits regardless of which direction Bitcoin is going. By predicting the right trends in Bitcoin price, traders can get higher returns in less time.

Suppose we used 1 BTC to open a short contract when Bitcoin was trading at $ 50,000. Please note that 1 BTC with 100x leverage can open a contract worth 100 BTC.

When the Bitcoin price fell to $ 48,000. The profit is ($ 50,000 – $ 48,000) * 100 BTC / $ 48,000 * 100% = 4.16 BTC.

Bexplus offers 100-fold leverage in BTC, ETH, DOGE, ADA and XRP futures contracts. No KYC is required and it is available to US dealers. If you are a beginner, the demo account will be really useful for you to improve your trading skills in a real-world environment without having to worry about losing money.

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