Bitcoin Sell-off is an indication of a Bullish Trend.

After Pfizer’s announcement on the effectiveness of its coronavirus vaccine, money started flowing out from safe-haven assets and into risk-on assets like stocks. For the first time since March, All Inflow Exchange Mean (MA7) neared 2. This indicates that Bitcoin Whales have sold a significant amount of Bitcoin since the announcement of Pfizer’s vaccination against COVID-19. However, based on previous market cycles, experts claim that sell-off from whales is an indication of a Bullish trend in the market.

To understand the logic behind why a large sell-off may in fact indicate a bullish trend, one needs to understand the motivations of Bitcoin Whales. Bitcoin Whales are individuals or entities who hold large amounts of Bitcoins, enough to manipulate market prices. In March, when Bitcoin declined to as low as $3,596 last March, MA7 had hit 3, indicating large cash-outs. Many Whales are motivated to either make profits in bull-run or seek higher demand to build up liquidity or adjust their position. So, it’s indicative that Bitcoin Whales go short the market is not necessarily Bearish. Whale-induced sell-offs, in turn, assist in recovering prices for Bitcoin by pacifying selling pressure on the cryptocurrency.

Apart from historical trends where Bitcoins have rallied from whale-induced sell-off, even on chain fundamentals indicate a Bullish outlook. The daily active address is an important indicator, as it indicates a daily transfer of Bitcoin to personal wallets or over-the-counter deals particularly among high-net individuals. According to Glassnode’s data, this figure has reached an all-time high! Emphasizing the point that Bitcoin sell-off is an indicator of a bullish trend.

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