CryptoQuant Warns of Potential Bitcoin Rally Halt

The surge of Bitcoin towards $100,000 has triggered sales by hodlers, potentially steering the trajectory into bearish territory as retail investor demand wanes, according to CryptoQuant.

?Long-Term Holders sold 827,783 BTC in 30 days.

This is one of the bearish on-chain signals behind this BOLT statement.

A thread on more key signals behind this claim?? https://t.co/C2M9CHM83c pic.twitter.com/NgIBf8i3Vm

— Maartunn (@JA_Maartun) December 8, 2024

“It’s a game of musical chairs: enjoy it, but be ready for the music to stop,” specialists warned.

Experts estimate that since November 8, long-term investors have reduced their positions by 827,783 BTC (~$81.2 billion).

Approximately 30% of this pressure was offset by the purchase of 149,800 BTC by MicroStrategy and 84,193 BTC by ETF issuers during the same period.

“So who is accumulating the other coins? Short-term holders. […] Retail demand (averaged over 30 days) has reached annual highs. History shows they usually buy during strong trends and are vulnerable when prices fall,” explained CryptoQuant.

Signals from the Derivatives Market

Observations indicate that small investors are actively using leverage. This is evidenced by record levels of open interest (OI) in Bitcoin derivatives, totaling $61.2 billion.

Current values of the Sell-Side Risk Ratio indicator may also suggest the risk of forming a peak, analysts highlighted.

QCP Capital noted that for Bitcoin and Ethereum, the key levels remain at $100,000 and $4,000. These coincide with the option strikes with the highest OI expiring on December 27.

Asia Color — 9 Dec 24

1/ BTC & ETH at Key Levels. Last week, #BTC hit $100K and #ETH $4K before pulling back. Options data (27DEC24 expiry) shows these levels align with the highest open interest. Could we see a squeeze higher?

— QCP (@QCPgroup) December 9, 2024

Specialists doubted that major players would allow a sustained breakout above these resistances before expiration due to the weakening speculative sentiment on Deribit and the shift of bullish bets to March 2025 (strikes in the $130,000-150,000 range).

CoinDesk takes a more optimistic view of the situation. The publication believes that potential resistance is formed at the $120,000 mark, where OI reached $1.94 billion.

At the time of publication, the contract with a $100,000 strike was the second most popular with an OI of $1.8 billion. It was followed by a call option with a strike price of $110,000 and an OI of $1.68 billion.

The publication also noted interest in the $200,000 strike — OI reached $500 million. Investors prefer to build strategies with this level in contracts expiring in June and September 2025.

Previously, Real Vision’s chief analyst Jamie Coates warned that Bitcoin might enter a correction in two to three months.

From December 1 to 7, cryptocurrency investment funds received $3.85 billion — a historical maximum.