The price of Bitcoin (BTC) crossed $ 17,400 in a strong intraday rally. In fact, on Coinbase, BTC got close to $ 17,700, setting a new high in two years. As BTC slips through the multi-year resistance of more than USD 17,000, analysts are divided on the near-term outlook. Some say BTC is poised for a pullout as whale deposits start to increase. Others believe there is little resistance up to USD 20,000 and that a record high is likely ahead of the next deep correction.

Bitcoin’s momentum over the past month has been particularly impressive for two main reasons. First, during previous bull cycles, as longtime trader Peter Brandt explained, BTC saw up to nine corrections. But during the ongoing rally, BTC has only seen two 10% corrections. Second, Bitcoin has consistently recovered from areas where corrections were expected, such as on November 16, when it hit $ 14,774 on Binance.

However, calls for a downturn are also on the rise as market sentiment around Bitcoin rises. Speaking with Cointelegraph, Ki Young Ju, CEO of crypto data provider CryptoQuant, said the Exchange Whale Ratio indicates that whale deposits on exchanges are on the rise. In the short term, this could put selling pressure on BTC. Traders are also saying that BTC’s current highs at $ 20,000 could be front-run leading to a correction before hitting the level.

A small drop in Bitcoin?

When Bitcoin whales deposit BTC on exchanges, the trend usually shows the intention to sell from high net worth investors. According to CryptoQuant’s Tokens Transferred metric and Exchange Whale Ratio, deposits of both whales and general investors are starting to increase. This means that more investors are going to exchanges to make a profit on their BTC positions. Ki said:

“Transferred tokens (not adjusted to the entity) on the Bitcoin network are increasing, indicating that whale wallets are moving their money. And the Fund Flow Ratio for all exchanges is decreasing, meaning that exchanges have not triggered these large trades. […] I think there are still huge OTC deals going on. That is one of the main reasons why I still use Bitcoin for a long time. “

The Exchange Whale Ratio is also hovering at a level that has historically led to a major price drop. Ki said the ratio has hovered above 85% for the past few days, putting Bitcoin in a risky position for a possible correction. Since there is virtually no resistance between USD 18,000 and the USD 20,000 peak, it would be reasonable to expect whales to make a profit around USD 17,000.

Whales seek liquidity for both buy and sell orders because they are dealing with larger volumes. Selling when the price of BTC goes up is ideal for whales as it limits potential downside volatility. Therefore, chances are that whales will want to sell between $ 17,000 and $ 18,000 as the last stop before ever seeing a new record. As Ki added:

Looking at ‘Exchange Whale Ratio (72h MA)’, the BTC price is likely to face minor corrections. […] When this is lower than 85%, there is a good chance that the price will continue to rise. Between 85% and 90% indicates a correction, and above 90% suggests a large price drop could occur. We run a certain correction risk as this value has recently risen above 85%. “

Some pseudonymous traders have also predicted that BTC will see a high in the near term before hitting a new all-time high. In the medium term, even if BTC’s momentum is strong, a trader known as “SalsaTekila” said a retest of lower BTC support is expected. He pointed to $ 12,000 as the potential area that the next deep correction could lead to. Given Bitcoin’s historical cycles, the trader also said a six-month correction would not be uncommon.

A continuous bull rally until the end of the year

On top of Bitcoin’s favorable technical structure, the noticeable spike in daily volume in the cryptocurrency market supports the bull’s case. On November 17, Binance CEO Changpeng Zhao said the exchange saw a once-high system load, indicating that the demand for cryptocurrency trading is on the rise.

Arcane Research in the same way found it Bitcoin spot volume is up 270% in the past month. The marked increase in the volume of the cryptocurrency market in general shows that real demand is behind the ongoing bull run. Arcane Research’s weekly report reads:

“The daily volume on Thursday last week was the highest since the brutal crash in March, and the volume has also remained high in recent days. As a result, the 7-day average rose to new highs this week. Bitcoin volume is up over 270% in the last month. “

But despite all the above positive factors, the mainstream is not involved in the ongoing rally. Google trends shows that the popularity of the keyword “Bitcoin” is only 16% of what it was at the peak of 2017. A recent Bloomberg report calls the recent uptrend a rally that “no one is talking about.” These trends show that Bitcoin has significant room to grow until the end of the year.

But Matt Maley, an investor at Miller Tabak + Co. acknowledging the high institutional demand surrounding Bitcoin, said it remains uncertain whether individuals will return, as those who were “seriously burned” in 2017 are now likely to be “less enthusiastic” about BTC. The way this would change is if Bitcoin breaks above its all-time high of USD 20,000 and the FOMO – fear of missing out – returns around BTC. Therefore, chances are that if BTC ever hits a new record, a broader rally could ensue.