Despite Bitcoin's attempted recovery, these three signs beg for more caution.
Over the past few days, Bitcoin’s price attempted to recover and increased from below $29,000 to slightly above $32,000 on Tuesday. Unfortunately, the buyers weren’t convincing enough, and bears intercepted the recovery, pushing the price back towards $30K on Wednesday.five reasons for which this could have been expected and which put any further attempts of recovery in question.Typically, BTC held on exchanges is much easier to liquidate compared to that stored in cold wallets.
This is a clear sign that holders have little confidence in this rally. Moreover, it shows that they are “selling the bounce” instead of preparing for a further increase.Another note that the analyst made was that the “whale ratio in spot exchange is very active in the warning zone.” Coupled with the fact that realized supplies of UTXOs with a “balance of over $1M and between $100M and $1M are not getting any positive move – only small ones,” indicates that whales are not standing behind this most recent increase.If spot exchange reserves show how many bitcoins are held on exchanges, then the spot netflows reveal how many of them flow in and out.
High values of Netflow indicate increasing selling pressure. The inflow completely dominates the outflow, currently.” – noted the analyst. In addition to all of the above, the estimated leverage ratio also hit a new all-time high, revealing that there are a lot of leveraged positions, creating a higher possibility of liquidation cascade.
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