Whale Clusters Data Give an Idea of Bitcoin Threshold Level

On-chain analyst David Puell has highlighted numerous statistical info pertaining to Bitcoin (BTC), based on its 4-year cycle. Data indicates that $14,000 level is critical level for Bitcoin as it marks whale clusters.

As per Puell, whale clusters indicate several large investors who have acquired Bitcoin in the $9,000 to $12,000 range. Whales who purchased at $9,000 are recording comparatively large profits and those who purchased at the upper end of the price band are at break even.

A volatile price movement is expected around the clusters, with buyers and sellers strenuously attempting to take the Bitcoin’s price out of $12,000-$14,000 range. The data doesn’t present a clear picture and favors both reversal and continuation of the ongoing rally.

If the average price of whales is between $9,000 and $12,000, they have an indispensible need to book profit between $12,000 and $14,000 as it has been months Bitcoin has reached those levels.

On the down side, the whales would wish the rally to continue if the overall position is in profit or at breakeven. Puell anticipates accumulation to begin near $10,000 level, following Bitcoin’s rally to $12,000 or even $14,000. He explained his thoughts as follows:

“Finally, unspent whale clusters confirm a great battle taking place. Two actors at play: top buyers at 12k-14k reaching their breakeven price, and current buyers active after the first higher high in over a year. If we get a correction, it will most likely result in another major cluster of re-accumulation at the 10k area (as expected from the volume profile before); if we breakout, well… enjoy the ride.”

The prevailing situation in the Bitcoin market is distinct in comparison with earlier cycles. Puell stated that due to macro factors such as the pandemic, Bitcoin recorded unusual price volatility.

For illustration, on March 13, the price of Bitcoin fell to a low of $3,596 on BitMEX exchange, reflecting a 50% drop in 24 hours. The rare events that happened in 2020 have increased the possibilities of an unusual price cycle. Puell detailed:

“Looking only a year and a half back, we had some of the most interesting market structures in any Bitcoin cycle. During several attempts at a ‘typical’ bullish trend with a strong halving narrative, two swans hit price discovery one after the other: PlusToken and COVID-19.”

In the next few weeks to months, there are multiple factors that could affect the price of Bitcoin.

Of late, Bitcoin has shown a bit of correlation with gold, likely because of uncertainty in worldwide markets motivating investors to look at alternative investment asset.

The ultra-loose monetary policies implemented by central banks throughout the globe and the quick increase in liquidity will probably have a positive impact on the price of Bitcoin, according to several analysts.