Bitcoin Whales Play Safe as Market Turns Cautious
The biggest Bitcoin (BTC) traders are now taking fewer risks, according to Ki Young Ju, the CEO of blockchain analytics firm CryptoQuant. He shared with his followers that the interexchange-flow-pulse (IFP) indicator, which monitors the movement of BTC between spot and derivatives exchanges, shows that these major players, known as whales, are now in "risk-off mode."
What is the Interexchange-Flow-Pulse Indicator?
Traders move their assets to derivatives exchanges to use them as collateral for riskier leveraged trading. Ju explained that the IFP indicator is now below its 90-day moving average, signalling this shift in behavior.
"The Bitcoin IFP indicator turned red. Whale traders on derivatives exchanges are in risk-off mode… IFP (Interexchange-Flow-Pulse)… tracks Bitcoin movements between spot and derivative exchanges, reflecting market sentiment. Increased flows from spot to derivative exchanges could indicate sending BTC as collateral for new/existing positions. Whales moving BTC to derivatives often signal long positions, especially at cyclical market bottoms. The strategy targets Bitcoin exposure during IFP uptrends, with IFP’s 90-day moving average crossovers marking market shifts," Ju noted.
Current Bitcoin and Ethereum Prices
At the time of writing, Bitcoin is trading at $62,290, a drop of more than 3% in the past day. Meanwhile, Ethereum (ETH) is trading at $3,366, down over 4% on the day.
Ethereum's Market Heating Up
According to CryptoQuant, Ethereum's Market Value to Realized Value (MVRV) indicator is rising faster than Bitcoin’s MVRV. MVRV is the ratio of a digital asset’s market capitalization compared to its realized capitalization. This measure helps in understanding whether the token is undervalued or overvalued.
"This suggests that ETH’s market is heating up. Historically, when Ethereum surges, other alts tend to follow," noted the blog.
The trajectory of these two major cryptocurrencies, Bitcoin and Ethereum, provides insight into the broader digital asset market, highlighting the cautious stance of large traders and the heating up of Ethereum’s market.
