Whales are buying again

 Whales are buying again

Perhaps there is some significant Bitcoin news. 

Santiment discovered that whales had recently started to re-accumulate.

We can see in the graph supplied by Santiment that public addresses with more than 100 BTC and fewer than 10,000 BTC have been steadily losing BTC for more than a year. 

Before the last stage of the bull run, which caused the price of Bitcoin to reach new all-time highs on November 10, 2021, the peak was reached in October of last year. 

Exactly in November 2021, the whales started to sell their BTC holdings.

The graph that Santiment provided

The yellow line on the graph, which represents the proportion of the Bitcoin supply that appears to be in the whales' possession, rather than the total amount of BTC held by their wallets, should be taken with caution. Additionally, the drawing emphasizes the oscillation in a more extreme way than usual. 

In actuality, while the current value has only decreased to 44.29%, the high in October 2021 represented more than 49% of the total Bitcoin supply held on all addresses where 100 to 10,000 BTC were stored. 

However, the pattern over time, not the size of this reduction, is what matters most.

As a matter of fact, the decrease that started in November 2021 essentially lasted until a few days ago, when it instead appears that it may have reversed. 

In response, Santiment notes that Bitcoin whales spent 13 months selling BTC as the price plummeted, but in the last five days, following a sharp decline in the first three weeks of November, they have started to re-buy. They have specifically put 47,888 BTC to their wallets. 

To be honest, five days aren't long enough to definitively show a trend change, but they may theoretically also signal the start of a similar dynamic.

The information regarding Bitcoin's whales may inspire a wave of optimism

It is important to keep in mind that whales, as opposed to tiny retail investors, are frequently unmoved by mood or emotion and purchase when prices are low because they think they will rise.

In fact, when prices drop, a dynamic that frequently occurs is retail panic selling, with whales utilizing this to purchase at a discount and accumulate. 

Of fact, the opposite can also occur; excesses of enthusiasm frequently lead to retail purchases after prices have increased, possibly from the very whales who had earlier purchased while prices were low. 

Although entirely speculative, this dynamic happens frequently in the financial markets.

Although not confirmed, it is plausible that whales are currently utilizing the cheap prices to buy and accumulate while many retail businesses are still selling out of concern for additional price falls.

The small peak

The lowest price of Bitcoin in 2022 up until a few days before the FTX collapse was the $17,500 mark reached in June following the bankruptcy of Celsius.

When FTX failed in early November, the price of bitcoin dropped even lower, reaching $15,500, which is now the new minimum peak for the year. 

This is a lower fall than in the past because it is 77% below the record high of $69,000 in November of last year. 

While the minimum peak was reached at -85% from the highs in each of the two previous post-bubble bear markets, 2014/2015 and 2018, Bitcoin's price increase was far slower in percentage terms during the bull run of 2021 compared to 2013 or 2017.

So, even though a further collapse is possible, potentially below $12,000, there are indications that the decline may be coming to an end. On the other hand, the price now is higher than the low from November 10.

It should be noted that, for instance, the peak of the most recent cycle happened precisely in November of last year, while the bottom was reached twelve months after the high. 

Furthermore, the collapse at the end of 2018 was actually caused by a single event (the hashwar) and happened in a single drop that lasted around 32 days, but the collapse this November caused by the bankruptcy of FTX lasted only four days and has already ceased.

The price of Bitcoin did not drop below the lows of November 10 as a result of yesterday's announcement of BlockFi's bankruptcy, suggesting that the November 2022 plunge may have ended. 

Whether there will be other incidents of this nature, possibly in December, or whether the bad news is now finished, remains to be seen.

The biggest Bitcoin investors

With more than 4.6 million BTC held worldwide, the address range between 1,000 and 10,000 BTC, also known as the whale range, continues to contain the most Bitcoin altogether. 

Second, at 4.3 million BTC, is the range between 10 and 100 BTC, which is the range of significant holdings who cannot be categorized as whales. 

The 100–1,000 BTC price bracket comes in third with 3.8 million.

It is important to remember that there are more than 2 million Bitcoin held in the 1 to 10 BTC category, which isn't much less than the 2.2 million held in the 10,000 to 100,000 BTC area. Given that they are equivalent to those held by small- to medium-sized savers, this indicates that the number of Bitcoin owned by exchanges at this time is not very large.

Article Credit: Cryptonomist

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