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On-chain data shows that the Bitcoin whale ratio has been rising recently as leverage in the market has remained around a historically high value.
Both Bitcoin Whale And Leverage Ratios Are Now Around ATHs
As noted by an analyst in a CryptoQuant afterBTC investors are currently involved in some risky futures market trading.
the “swap whale ratio” is an indicator that measures the ratio between the sum of the top ten inflows to exchanges and the total inflow of currency.
Since the top ten transfers to exchanges are believed to come from the whales, this statistic tells us whether or not whales are active in the market right now.
When the value of the ratio is high, it means that whales are a major contributor to the influx of currency right now.
Here is a chart showing the trend in the Bitcoin-whale ratio over the past few years:
Looks like the value of the metric has been elevated in recent days | Source: CryptoQuant
As you can see in the chart above, the quantity of the post has marked the relevant trend periods for the Bitcoin exchange whale ratio.
It seems that when the indicator has peaked and then starts to fall, the price has also taken a big hit.
The chart shows that the statistic has risen in recent months and is now hovering around all-time highs.
The data for the “estimated leverage ratio” is also displayed. This indicator tells us the amount of leverage used by the average trader in the futures market.
Bitcoin’s leverage ratio has risen very sharply lately and is now also on a new ATH, suggesting that investors are taking a lot of risk right now.
High leverage in the market has led to a more volatile BTC price in the past. Under these circumstances, if the whale ratio also starts to decline and follows the same trend it has in the past, it could turn bearish very quickly for the crypto.
At the moment of writing, The price of Bitcoin is floating around $19.5k, up 2% over the past seven days. Over the past month, the crypto has gained 1% in value.
The chart below shows the trend in the price of the coin over the past five days.
The value of the crypto seems to have been trending sideways since the plunge a few days back | Source: BTCUSD on TradingView
Featured image from Peg Lemkuil on Unsplash.com, charts from TradingView.com, CryptoQuant.com