Bitcoin Risks Capitulation As Binance Inflows Signal Strong Whale Selloff

Key Insights:

• Bitcoin exchange inflow on Binance spikes in a move characteristic of whale selloff.
• Bitcoin’s whale order book on CoinGlass leans in favor of distribution.
• Leverage shakedown pushed for significant liquidations this week.

Bitcoin price saw some optimism around potential recovery this week after a bearish assault earlier in the weekend. However, BTC was still at risk of capitulation despite some accumulation and a slight uptick during the week.

Analysts kept an eye on Bitcoin price and market behavior this week to establish its next potential move. Some noteworthy observations were made, including a weak recovery attempt and weak demand.

Recent market data even suggested the possibility that whales were interested in further suppressing the Bitcoin price. Exchange inflow data provided by CryptoQuant revealed a surge in Binance inflows.

According to the analysis, Bitcoin exchange inflows’ 7-day moving average pushed as high as 13.5 BTC per deposit. This indicated that whales were heavily involved in BTC’s flow into exchanges.

Large Order Book Data Hints at Shifting Tide for Bitcoin

Sustained Bitcoin inflows into exchanges could force Bitcoin to capitulate to the downside. While the data initially revealed that the whale cohort contributed to the downside momentum, that seemingly changed in the last 24 hours.

CoinGlass’s large orderbook statistics disclosed a shift, characterized by rising demand from whales. Bitcoin buy orders were significantly higher in net value compared to filled sell orders.

This was observed across the board. For example, over $13 million worth of net positive spot flows into BTC were registered across Binance, OKX, and Coinbase in the last 24 hours.

The bullish sentiment also extended to the derivatives segment, where roughly $275 million worth of net buys were observed during the same period.

As a result, Bitcoin price demonstrated some relative bullish momentum. Speaking of relative strength, the RSI was about to cross above its 50-day moving average at press time.

A crossing above the 50-day MA historically confirms rising bullish momentum. However, keep in mind that Bitcoin was not out of the woods yet as far as downside risks were concerned.

Whale activity was still relatively low compared to the exciting phases of the market that are usually characterized by heavy whale activity. This latest whale activity was more akin to whales testing the waters.

Is Another Liquidation Shakedown on the Horizon?

The bearish Bitcoin momentum observed this week caused significant liquidations earlier this week. Leveraged longs faced the wrath of the bears, with liquidations surging to $513 million.

In contrast, roughly $114 million worth of short positions were liquidated since Sunday.

Bitcoin’s liquidation heatmap demonstrated a more conservative approach among the bulls. This was evident by the notably lower level of leveraged long positions compared to short trades.

The maximum amount of liquidity locked in 100X leverage was about $25.94 million, set to be liquidated if the price drops to $108k. On the other hand, just over $53 million in short liquidation leverage.

The higher amount in leveraged 100X short positions signaled that another liquidation event was likely to occur if BTC pushed as high as $114,190.

Meanwhile, the end of the week will also usher in September, which is a month characterized by heavy expectations. One of the main reasons was the rate cut expectations, which could shift gears to a risk-on environment.

Meanwhile, the Trump family is extending its roots deeper into crypto. It recently announced American Bitcoin, a crypto mining company that will reportedly go public on the NASDAQ in September.

The listing may be considered yet another win for Bitcoin. However, whether these developments will strengthen BTC’s bullish resolve remained unknown.