Bitcoin surges pass $11,500, BTC wallets activity hit 2.5 year high

Recent trends and macros surrounding the world’s most valuable crypto asset have shown that investors need to start selling some of their bitcoins for profit.

The facts: BTC rose above the $12,000 price level, roughly about 23 hours ago. But there were warning signs indicating that daily active addresses on the network were not keeping up with the surging price, and that a correction would be swift. A bearish divergence also formed.

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Yesterday, the price continued to climb towards $12,000 in spite of DAA dropping from 1.06  million on Friday to 959, 000 on Saturday (-9.5% drop). As a result of this bearish divergence, Bitcoin fell back to $11,000 price levels in a hurry (-8.3% price drop).

READ MORE: Earning BTCs without Having To Pay Money

Warning signs: While crypto exchanges are still sorting out liquidations in the BTC market, one should probably ask what the BTC whales are doing. That sell-off was perpetuated and possibly triggered by an over-leveraged market.

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“In the last 24 hours, BitMEX lost the most open interest in Bitcoin futures – about $105M. Followed by OKEx, Huobi, and Binance (all losing more than $50M),” Larry Cermax said.

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In the last 24 hours, BitMEX lost the most open interest in Bitcoin futures – about $105M. Followed by OKEx, Huobi, and Binance (all losing more than $50M). pic.twitter.com/HzJeiKxRJg

— Larry Cermak (@lawmaster) August 2, 2020

However, Rafael Schultze-Kraft, Chief Technical Officer at Glassnode, with a detailed diagram, explained why despite the recent plunge, the world’s flagship cryptocurrency still had the bullish momentum in play.

READ ALSO: There are now 18,000 Bitcoin millionaires

“Investors are not moving $BTC at a loss. Adjusted SOPR (hourly chart) is still above 1 despite the sharp price drop, showing no sign of a short-term trend reversal (yet). Closely watching this level,” Schultze-Kraft said.

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Investors are not moving $BTC at a loss.

Adjusted SOPR (hourly chart) is still above 1 despite the sharp price drop, showing no sign of a short-term trend reversal (yet).

Closely watching this this level.#Bitcoin pic.twitter.com/W1fwB61DWZ

— Rafael Schultze-Kraft (@n3ocortex) August 2, 2020

Why is BTC volatile? The price of Bitcoin is so volatile because of its high use for financial gain and speculating advantages used by global investors and crypto traders. As such, individuals and hedge funds sell and buy Bitcoins as they would do for any other financial asset (stocks, bonds) with regulatory limitations.

READ ALSO: Mysterious Bitcoin whale moves 15,022 BTCs worth $162 million

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What you should do: Nairametrics advises cautious buying in this fast-growing financial asset, as high market volatility could expose you to significant losses. It’s highly recommended you seek advice from a certified financial advisor when buying these crypto assets.

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