The Whales Are Back Pushing Bitcoin Past $50,000
Last week, Bitcoin whales made a substantial sell-off, however those with addresses with the largest number of Bitcoin are back in the buying game as the price headed toward the $50,000 mark.
Whales are generally defined as entities or individuals which have wallets with $10 million Bitcoin or above per address.
Interestingly, during the past two days there have been conflicting opinions on which direction the whales are now taking given the full recovery to pre-Elon Musk tweet values.
Whilst some analysts have highlighted a drop in the illiquid supply ratio as dormant Bitcoins move, hinting at a potentially less than confident approach that could cause whales to sell off more Bitcoin, other analysts have noted that Bitcoin whales are back to accumulating large amounts of Bitcoin again.
Looking at this dynamic over a longer period than just the last two weeks when the prices have been very volatile and have rebounded from the lower $30,000 mark following Elon Musk’s famous tweet to mid $40,000s after the US government’s proposals for tax treatment and regulation of cryptocurrency, wallets holding approximately $50 million or more worth of bitcoin have steadily increased their buying since the end of June, according to new data from blockchain firm Chainalysis.
Some whales are sitting patiently and looking at the total market cap, which is rapidly approaching $2 trillion, therefore are not selling in or out and looking at the long term.
Over previous periods of time, an increase in Bitcoin flowing into cryptocurrency exchanges has come before a price reduction, and this is now an activity being looked at closely by participants with large numbers of Bitcoin held in their wallets.
However, “The bitcoin accumulated by recent large investors is related to the medium-term change in bitcoin price,” Philip Gradwell, chief economist at Chainalysis, told CNBC.
During the past three days, the inflow of Bitcoin to exchanges and net flow of Bitcoin on exchanges, both metrics indicate that the BTC wallet balance on exchanges has increased which have in the past preceded sell-offs.
This is an interesting dichotomy, because usually whale activity pretty much follows market price, but this time, as the price of Bitcoin goes up, analysts are reporting different potential activity by those with the largest amounts of Bitcoin in their wallets.