Despite inaugurating the week with fresh record highs, Bitcoin (BTCUSD) saw its returns turn negative as its price fell by 5% to land at $116,850 on Tuesday. This decline followed a price rejection at $120,000, the highest-ever daily-candle close, which now acts as a vital level for traders. Currently, on the four-hour chart, BTC is trading beneath the 20-period simple moving average (SMA), and a potential close below this key indicator might instigate further downside.

Bitcoin’s market might become more volatile due to the surge in whale activity on Binance, as indicated by a recent CryptoQuant analysis. The firm’s data reveals that BTC whales deposited roughly 1,800 BTC onto Binance on Monday. The Exchange’s Inflow by Value Bands sheds light on the scale of these transfers, with transactions exceeding $1 million accounting for over 35% of the total Bitcoin inflows to the exchange.

“This denotes a concerted and deliberate move by significant players to position assets on the most liquid platform in the world,” CryptoQuant analyst Crazzyblockk clarified in a QuickTake analysis on Monday. This influx of deposits implies that large-scale investors are either planning to secure profits post the historical run to $122,000 or intend to leverage Binance’s deep liquidity to hedge or initiate new positions amid peak volatility.

Furthermore, André Dragosch, European Head of Research at Bitwise, noticed a notable increase in profits realized by long-term holders, which explains the ongoing correction. A substantial amount of profit-taking, coupled with 98% supply in profit, often precedes significant price corrections.

Bitcoin’s recent rally resulted in a CME futures gap between $114,380 and $115,630. Traders approach these levels from the point of resistance or support, based on the market structure, to “fill” these gaps. If history repeats itself, Bitcoin’s price should eventually drop to fill the CME gap down to $114,400.

However, Michael van de Pope, MN Capital’s founder, highlighted the possibility of a further correction towards $108,000. “As long as Bitcoin stays above $108K, the trend remains upwards. The bull market is here,” he stated.

Please note: This article does not provide investment advice or recommendations. Each investment and trading move involves risk. Therefore, readers should conduct their own research when making a decision.

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