The ‘Whale Dumping’ Indicator that Predicted Past Bitcoin Crashes Is Back Again

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The past weeks have been all up for Bitcoin, now sitting around $46,000. Judging solely by press articles and Twitter sentiment, it seems like everyone is in bull mode. But experience taught us crashes happens when we expect them the least. In that context, it’s worth noticing that the ‘Whale Dumping’ indicator gives a pessimist look on the near future of Bitcoin price.

In a nutshell, the ‘Whale Dumping’ Indicator tracks the flow of bitcoin from Whale wallets onto exchanges – likely for selling them. In crypto lingo, a whale is an investor (an individual, company or institutional) holding a very large number of coins, admittedly above 1,000.

As reported by CryptoSlate, Ki-Young Ju, the founder of crypto analytics tools CryptoQuant, warned yesterday that this indicator just entered the red zone. He added, “It’s highest since Feb 2020 before the mass-dumping. Don’t take too much leverage on your longs. Be careful.”

What Does the Whale Dumping Indicator Say Right Now

CryptoQuant uses two ways to form its indicator: The BTC All Exchanges Inflow Mean (24h MA), and the Exchange Whale Ratio (72h MA). The first one is the average amount of bitcoin deposited into all exchanges. The second is the relative size of the top 10 inflow transactions to total inflows.

From the charts provided by CryptoQuant of past periods, it can be noticed that the Whale Dumping Indicator enters the red zone sometimes just after the bitcoin price is going down. This shows whales nourishing the bear market.

Today, we have just entered the red zone while the price have been going up in the last days and sideways just these last 24h. It will be quite worthwhile to keep an eye on the Whale Dumping Indicator and see if the correlation holds up. As always, it should be reminded that this is just one indicator and there are many others.

Find more information on this indicator on CryptoQuant’s website.

This article is informational in nature, not an investment advice.

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