The price of Bitcoin (BTC) dropped below $17,000 again on Nov. 27 across top exchanges, including Binance. The recent pullback comes as whale exchange deposits started to increase.
Ki Young Ju, the CEO of CryptoQuant, reported that the All Exchange Inflows Mean indicator reached the “danger zone.” Historically, this caused BTC to suffer short-term corrections.
After the price of Bitcoin briefly dropped to $16,200 on Nov. 27, it started to show some signs of recovery. It remained above the $17,000 level for over 11 hours before another leg down.
Following the sharp drop of Bitcoin, a low volatility price range was expected. The earlier drop on Nov. 26 to $16,200 decimated exchange order books, particularly in the futures market. Hundreds of millions of dollars worth of futures contracts were liquidated within several hours.
But as soon as whales began to deposit BTC to exchanges, the price started to fall. This suggests that there have likely been many traders buying the dip in the derivatives market who could be getting squeezed out.
Ki wrote on Nov. 27:
“BTC Whales are depositing to exchanges. I expect dumping in the short-run. All Exchanges Inflow Mean(144-block MA) hit 2 BTC. I think we’re in a danger zone. The price is likely to go sideways or down when whales are active on exchanges.”
Where is the bottom?
The expectations of the short-term Bitcoin bottom varies. Some traders expect the $16,000 level to hold, while others anticipate $15,000 and even $14,000.
A pseudonymous trader known as “Beatlorion” said a drop below $15,000 has become a possibility. Although BTC might not drop that low, the trader said that he feels more confident shorting than longing in this environment.