Short-term traders brace for a probable fall while Bitcoin bulls stay put
Bitcoin has maintained a streak in trading on a 9-month high. Consequently, increasing the Bitcoin exchange reserves metric, as per the report of an anonymous CryptoQuant analyst crypto hell.
This left a positive impact on the traders as they have been profiting from the recent increase in BTC price.
Until now there was $2.19 million BTC present in the Bitcoin exchange reserve. This is the possible amount of Bitcoin available on crypto exchanges.
Short-Term traders run the BTC market
A rise in the exchange reserves indicates higher selling pressure whereas a decline suggests that more traders are focused on accumulating the assets. Moreover based on current statistics of exchange reserves the analyst suggested that “it’s likely that short-term traders are the ones sending Bitcoin to the exchanges.”
Cryptohell analyzed the activity of short-term traders by using the Short-term Output Profit Ratio. According to his analysis, short-term traders are responsible for a significant portion of the coin distribution volume implying that they control the market. Moreover, the investor’s cohort is selling their holdings due to multiple factors affecting the current market situation.
As Ramadan is drawing near a bulk of Muslim traders are withdrawing their investments could be one of the factors. Other factors may include traders taking out their investments as soon as BTC hits $30,000 and the FOMC meeting coming on 22 March.
Cryptohell also clarified why the traders will take out investments when price reaches $30,000. Because he considers $29K to $30K another major resistance in Bitcoin price. As it is already at almost $27,000 the traders might be getting to sell. However, he still considers the FOMC meeting the main factor.
Bullish sentiment surrounding the King Coin
The Short-term traders might have started to sell their coin while fearing the price drop. But according to the data from Santiment suggests that the on-chain performance of BTC indicates a highly bullish sentiment among traders.
The Bitcoin-weighted sentiment was 2.407 which suggests that the traders are convinced that they will witness another price surge. The analysis of the MVRV ratio also shows little to least bearish signals.
Bitcoin restored its positive position after performing well throughout the week despite a little drop in price during the weekend. Though the funding rate of BTC went negative for the first time after that this year.
Another marker of Bullish sentiment around the Bitcoin holders was the spike in open interest over the past few days.