Data from Glassnode has revealed how the large Bitcoin traders showed expert timing in the derivatives market during the market reversal.
Interestingly, this same behavior wasn’t seen during the second ATH break above $126,000 on Monday. In fact, the whales behaved in the completely opposite manner: the Long/Short Bias saw a plunge deep into the negative territory. “The shift to a net short bias suggests profit-taking on longs alongside new short positioning,” notes the analytics firm. Thus, it would seem that the large traders were anticipating a price pullback after the price top, so they started moving in advance.
The Long/Short Bias only saw a further decline when Tuesday’s fast crash below $121,000 took place. Now, the metric is sitting at a value of -4,416.20 BTC, which means bearish bets outweigh bullish ones by more than 4,400 tokens.
It now remains to be seen how sentiment among the Bitcoin whales will develop in the coming days. Another shift from smart money could potentially foreshadow another shift for the asset’s price as well, given the latest pattern.
As displayed in the above chart, the Bitcoin Percent Supply in Profit broke above 95% when it crossed the $117,000 level during the rally. Naturally, the metric later went on to reach 100% as BTC set a new ATH, since everyone is in the green whenever the cryptocurrency explores new price levels.
Historically, the metric being above 95% has often indicated overheated conditions for BTC. As the analytics firm explains, such a high value is “a hallmark of Euphoria phases, where widespread profitability often fuels accelerated profit-taking and rising market risk.”
Bitcoin has shown some recovery during the past day as its price has returned to the $123,000 mark.
