According to on-chain data from the analysts at Whalemap, $13,000 has become a support level for the price of Bitcoin (BTC). Whale clusters indicate that whales — or large BTC holders — are continuously accumulating.
Whale clusters form when a large number of BTC are transferred to a new address and the BTC is unspent. This indicates that whales either bought or transferred their BTC to other whales, signifying buyer demand.
A large whale cluster has emerged at the $13,000 level, which could turn into a key support level.
Why a $13,000 support would be ideal for a Bitcoin rally
The ongoing rally of Bitcoin has been different from previous uptrends in that it is considered to be more sustainable.
Bitcoin started to rally and gain momentum from Sep. 23. Since then, it has repeated the pattern of rallying and then consolidating, establishing clear support levels.
On Sep. 23, BTC initially rallied from $10,200 to $10,600, then consolidated. The rally began once again on Oct. 8 up to $11,700, then stabilized at $11,400 for a few days. Then on Oct. 19, it started to rally again.
Due to the healthy rally of Bitcoin, whales have been accumulating BTC in key areas. The whale cluster at $13,000 might suggest that high-net-worth investors do not expect a massive pullback occurring in the near term.
Speaking to Cointelegraph, Whalemap market analyst Andy Bohutsky explained:
“We have a whale cluster at $13,000 now, with a lot of unspent bitcoins belonging to whale wallets at that level. Since, Bitcoin’s price is above the $13,000 level — it should be acting as support. The origin of the whale cluster could be due to OTC deals: looking at the HODLer volume during the short time we spent at $13,000 shows that a lot of BTC was moved during that time (HODLer transaction volume at 01:00 UTC time on 23 October totaled to more than $1billion dollars).”
The $1.1 billion Bitcoin transaction on Oct. 23 was later found to be a transaction made by Xapo. Since Xapo is a cryptocurrency custodial service provider, there’s a good chance that this was an over-the-counter transfer.
Risk of a massive profit-taking correction is low
Meanwhile, another relevant metric, the Spent Output Profit Ratio (SOPR) gauges whether investors in the cryptocurrency market are taking profit on their positions.
Bohutsky explained that while SOPR has been consistently volatile, it did not substantially increase when BTC surpassed $13,800.
This data suggests two main things. First, investors have been taking profit regularly throughout the past month — reducing the probability of a large profit-taking pullback. Second, even at a multi-year resistance like $13,875, whales are not taking large profits. He said:
“The origins of BTC that was spent during that time is shown in the ‘Map of spent bitcoins’ chart (red bubbles). SOPR for the 01:00 UTC time on 23 October does not go too high though which is quite surprising. In terms of macro levels, volume profile shows them pretty well where the levels shown also coincide with what a technical trader would consider valid S/R as well.”
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source https://cryptonews.wealthsharingsystems.com/2020/10/whale-cluster-at-13k-is-now-a-support-zone/
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