Identifying the bottom for Bitcoin remains a challenging endeavor, even for the most experienced analysts. However, recent on-chain indicators and trading data appear to hint that Bitcoin may have established a bottom this month. The more pressing question now is whether this bottom is merely temporary or indicative of a longer-term trend reversal.
Recent findings suggest a notable indicator: the Whale vs. Retail Delta, which dramatically shows bulging bullish signals for Bitcoin. This particular metric measures the divergence between the long positions of large investors—often referred to as ‘whales’—and those of retail traders. It effectively captures whale expectations regarding Bitcoin’s impending volatility within the derivatives market.
Joao Wedson, the founder and CEO of Alphractal, points to a historic moment in this context, noting that whales are currently holding dominant long positions for the first time ever, significantly outpacing retail traders. In February and March, a similar spike in this indicator marked a bottom around the $75,000 level. “Whenever these levels got this high in the past, local bottoms formed—but large positions also got liquidated,” Wedson noted, adding to the complexity of interpreting this data.
In tandem with this indicator, Bitcoin’s spot trading volume is on the rise while open interest in the derivatives market is witnessing a decline. This indicates a shift towards a healthier market with lesser reliance on speculative trading. Data from CryptoQuant reveals that Bitcoin’s daily spot trading volume on Binance consistently exceeded $10 billion throughout November, a significant increase compared to previous months. In contrast, the daily open interest on Binance dropped by $5 billion from the previous month.
This shift suggests a move away from speculative positions, with capital flowing back into the spot market. Here, investors are purchasing actual Bitcoin instead of relying on high-leverage derivatives. Such transitions are often viewed as paving the way for stronger and more sustainable upward price momentum. Analyst Darkfost contextualizes this trend, remarking that when speculative positions are flushed out, it can reset the market and prepare it for a healthier phase, which seems to be happening on Binance.
While these indicators imply that Bitcoin may have successfully created a bottom this November, not all analysts share the same optimism. There are warnings that the current recovery might simply be a “dead cat bounce”—a term that refers to a short-term price recovery following a steep decline, which may precede a continuation of the downtrend. This looming risk may prompt traders to adopt a more cautious approach, reducing leverage and trimming positions in anticipation that the market could take another downturn.
