A widely followed crypto analyst is warning that Bitcoin may see high volatility if BTC fails to hold a key level as support.
In a new thread, crypto trader Ali Martinez tells his 138,700 followers on the social media platform X that Bitcoin may have a deep correction if it breaks below $106,800, the lower bound of a trading range on the hourly chart.
“Bitcoin remains range-bound, but all eyes are on the $106,800 support level. A breakdown here could trigger increased volatility!”
The analyst also says that a massive amount of Bitcoin has been taken out of crypto exchanges in the past month, a sign that investors have entered an accumulation mode.
“Over 30,000 Bitcoin have been moved off exchanges in the past month!”
Next, Martinez says that volatility may soon occur as the market is starting to show signs of being over-leveraged based on the estimated leverage ratio, which tracks the ratio of open interest divided by the reserve of an exchange.
“The estimated leverage ratio across exchanges is climbing fast, signaling that traders are taking on increasingly higher risk.”
The long-term holder cohort has been netting massive profits as Bitcoin soared to new all-time highs, according to the analyst.
“Bitcoin whales have realized $242.40 million in profits!”
However, the analyst says that Bitcoin may have more room to run based on the average amount of possible profits BTC holders are sitting on.
“Bitcoin traders are currently sitting on 27% average profits. Historically, things start to look toppy once profits exceed 40%.”
Bitcoin is trading for $107,093 at time of writing, flat on the day.
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