The Bitcoin price (BTC) is hovering under $19,500 again as whales in Asia continue to sell aggressively. On-chain analysts say that the $18,500 to $19,500 is a “no trading zone” until whale inflows subside.
Ki Young Ju, the CEO of CryptoQuant, said:
“For me, 18.5k-19.5k is no trading zone. $BTC will break $20k this year eventually, but I’m just normal long(1x) here since lots of fake-outs due to whales. Will punt another generation(10x) long when the market is silent — fewer exchange inflows and less trading volume.”
There are two key reasons why analysts are cautious about Bitcoin as it struggles to break out of $19,600. First, the high number of BTC deposits into exchanges by whales suggest high selling pressure in the market. Second, the $19,600 level has become a heavy resistance area.
$19,600 has to break with strong volume for a Bitcoin rally continuation
The $19,600 resistance level has continued to reject due to the selling pressure from whales.
Particularly, whales in Asia are consistently selling large amounts of BTC as it gets closer to the resistance.
For Bitcoin to see a broader rally in the near term, it would need to break out of $19,600 with strong volume and remain above it.
In the short term, this means that miners and whales would have to sell fewer Bitcoin to reduce the pressure on the market.
For now, there are little signs of a whale-induced sell-off coming to an end in the foreseeable future. Whale inflows and the whale reserves on exchanges remain high.
A pseudonymous trader known as “Bitcoin Jack, who called the Bitcoin bottom at $4,000 and called the rally until $19,000, said the market is currently cautious.
The Bitcoin price would need to surpass $19,600 to invalidate the caution, the trader said:
“Market keeps flip flopping around this level, failing to breakout with a clean swing failure pattern Notion of caution is warranted – clear 19.6 would invalidate that caution.”
What does this mean for the market?
There is significant uncertainty around the short-term price cycle of Bitcoin. Until BTC breaks $19,600 with strong volume, the lack of clarity around BTC would likely remain.
If this trend continues, it could have a negative impact on large market cap altcoins.
Altcoins typically mimic the price trend of Bitcoin with intensified movements to both the upside and downside.
Hence, when Bitcoin rises, altcoins rally strongly, but when BTC falls, they see a sharp pullback.
The problem for altcoins is that when Bitcoin stays within a tight range, it sees large downside movements but limited uptrends.
As CryptoSlate previously reported, technical analysts expect altcoins, like Ethereum, to outperform Bitcoin in the next bull cycle.
However, this is conditional in that it would first require BTC to break out and kickstart a convincing rally.