High net worth investors, or whales, have been buying Bitcoin more aggressively since Christmas, according to on-chain data.
Bitcoin whales (BTC) have been buying more since Christmas, according to on-chain data. This indicates that high net worth investors continue to eat up BTC’s supply.
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It is almost impossible to segregate institutional investors from individual investors through on-chain data. However, the trend shows that investors with large amounts of capital are increasingly entering the Bitcoin market despite its rebound.
Supplies of large Bitcoin holders. Source: Santiment
Why do whales keep buying more Bitcoin?
According to Santiment analysts, about $647 million in Bitcoin probably transferred from small to large addresses.
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Many analysts consider that addresses with more than 1,000 BTC or more are whales, since 1,000 BTCs are equivalent to more than USD 27 million at the current price of USD 27,100. The analysts wrote:
Analysts wrote: „During the last 48 hours since Christmas, #Bitcoin addresses with 1,000 or more USD BTC now have 0.13% more supply than smaller addresses before. This is approximately 24,158 tokens, which translates into USD 647.7 million at the time of writing.
Bitcoin has gone up almost three times since mid-2020 and it could be said that the BTC rise is limited in the near future.
Still, most on-chain data points show that fewer whales are selling on the major exchanges. Ki Young Ju, CEO of CryptoQuant, said
„The BTC whales seem to be sold out. Fewer whales are depositing at the exchanges. I believe this upward trend will continue as long as institutional investors continue to buy and the proportion of whales on exchanges remains below 85 percent.
Share of Bitcoin whales on exchanges.
There are two main reasons why whales might be accumulating Bitcoin in the current price range.
The price of Bitcoin was over $27,000: BTC’s market capitalization is now over half a billion dollars
First, despite Bitcoin’s excessive spike, the whales may believe that the $30,000 psychological barrier will be broken. If so, the options data suggests that $36,000 could be a likely target in the near future.
Second, there is no solid reason to anticipate a major correction other than the WEC gap and the high funding rate of the futures market.
But, if Bitcoin consolidates after each rally, as seen in the last two days, then the funding rate would probably normalize. When that happens, the derivatives market would be less overheated, increasing the likelihood of a new rally.
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A pseudonymous trader known as „Byzantine General“ said the market is giving mixed signals. Both long and short contract holders are being aggressive, making it possible to strangle short and long positions, he said:
„Such conflicting signals at this time. Both long and short are being too aggressive hahaha. I should probably sit on my hands.
The likely scenario in the short term is further consolidation
Generally, the price of Bitcoin on Coinbase is higher than Binance and other exchanges that depend on Tether. However, in the past week, Bitcoin has been trading slightly lower in Coinbase between $20 and $30.
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Although the gap is small, it shows that the U.S., which drove the Bitcoin rebound during December, may be seeing a slowdown in buyer demand. But, the Asian market and the derivatives market are experiencing an increase in buyer demand.
A Bitcoin analyst predicts a price of $100,000 for this upward cycle, and $1 million by 2035
With demand for Bitcoin in the U.S. spot market appearing to be cooling, Bitcoin could consolidate longer with less volatility.
