December 4, 2022

Analysis Suggests Whales are Keeping Bitcoin from Crashing

Various reports have suggested that amidst the slump, Bitcoin might see an increase in price. However, these reports also state that such increase can only be achieved when whales start selling. According to CryptoQuant, and one of its market updates released on May 27, here’s what you’d need to know. 

Capitulation & Small Whales

The crypto market is currently on its sour side, and holders are showing some forms of impatience. Currently, panic and FUD are built on the constant suggestions that the BTC/USD pair be pegged at its lower price of $23,800. On observing the unspent transaction outputs from several Whale wallets, Binh Dang, contributor for CryptoQuant noticed a selling trend from top wallets in the market. 

Individuals having $1 million and higher, worth of Bitcoin have started purchasing and holding more. Smaller big bags or whales, however, have been slow in either purchasing or selling holdings. According to Dang, “the aftermath of the first dip in January resulted in major acquisition of cryptocurrencies. During this period major altcoins exploded. However, from April 21st till now, Mega Whales have been diversifying their portfolios because they lack any information on what to purchase.”

 He further stated “Capitulation might occur when small whales and traders stop holding. Other wise, i’d start observing major movements within the $1 Million for a probable reversal trend.”

According to charts, big whales have constantly been decreasing their investment activities. Smaller whales have also began following the trend, and holders within $100,000 and $1 million as well. On the contrary, individuals below $100,000 haven’t shown any significant activity that might lead to capitulation. 

Julio Moreno, lead on-chain analyst for CryptoQuant mentioned that Major Whales have been building more of their portfolios. Smaller Whales, however, have been skeptical about the current market and its adverse effects. Data collected from Glassnode has reported a vast decrease in the number of individuals who qualify to be whales. 

Currently, any form of increase is attributed to Whale distribution, and on May 27, the number of Whales is at its lowest. Such numbers haven’t been recorded since July 2020, deducing that the bearish market might take longer. 

Observing Traded Volumes

Whales have previously established support regions below $27,000 earlier in May. During the May 12 dip, Whalemap noticed this pattern, and considered it a possible trend for smaller investors. Other researchers and analysts reported that the BTC/USD pair experienced an increased form of volatility. 

According to Crypto news website, Cointelegraph, on-chain trading volumes have slightly increased this week. However, the crypto market is still as volatile as ever, and one can only expect the unexpected from cryptocurrencies.