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Question #544

What insights do on-chain alerts of whales reducing positions near price highs offer for understanding Bitcoin supply shifts?

Category: General
They indicate whales withdraw liquidity at highs, causing abrupt price crashes and destabilizing the market sentiment drastically
They show whales buying more Bitcoin near highs indicating they firmly strongly support the current price rally
They reveal that major holders lock in profits at peaks which can signal near term selling pressure

Why is this the correct answer?

This is correct because whales reducing positions near highs indicate they are taking gains when prices are strong. Beginners should understand that on-chain alerts track large wallet movements, and when big investors sell at peaks, it can point to upcoming supply increases on exchanges, potentially leading to short-term downward pressure.

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