Analyst on Bitcoin: Why ‘you don’t want to be counter trading’ these guys
More often than not, Bitcoin whales make more headlines than institutions and retail traders, and for all the right reasons. When it comes to directional markets, especially when it is Bitcoin’s, it becomes important to track the movements of large wallets. While concentrated institutional holdings of Bitcoin pose a risk of volatility and price manipulation, whale holdings influence the supply-demand economics of Bitcoin.
In the prevailing market scenario, since all eyes are on Bitcoin yet again after its 12% gains from the 31k level, wealthy investors are making a comeback into the OG cryptocurrency. Bitcoin held by whale entities (1,000 to 10,000 BTC) rose by over 80,000 to 4.216 million BTC on 2 July, hitting the highest level since May. The number of whale entities also jumped to a three-week high of 1,922 towards the beginning of the month.
Analyst and trader Scott Melker in a recent video pointed out that it is an extremely good sign that whales are accumulating. He further added,
“It is very very interesting to see that whales are once again accumulating. In a free market like this, you want to be on side with the whales you don’t want to be counter trading.”
Melker pointed out that the more fear, doubt, and panic there is in the market, the more likely it is that whales accumulate. This whale accumulation can send the asset’s price up, finally ending its bearish cycle.
A recent Santiment report also highlighted that Bitcoin’s whale addresses holding between 100 to 10k BTC kicked off July with a 60k BTC accumulation spike, the highest daily spike of 2021. These addresses hold 9.12 million coins combined after holding 100k less BTC just 6 weeks ago.
This renewed accumulation by whale entities was further highlighted by analyst Willy Woo. In hindsight, it is undeniable that these wealthy investors played a leading role in rallying Bitcoin’s price to $60,000 in just five months.
"Nom nom nom… BTC so yummy today." pic.twitter.com/TLoHyaJtn2
— Willy Woo (@woonomic) July 3, 2021
The latest uptick in the whale balance may further suggest that the bottom may have been reached. Bitcoin was trading at $34,766 at press time on the back of a 24-hour price dip of 1.76%.
It is also interesting to note that just two weeks back, whales were selling off and some prominent whales even spoke about moving profits from trading Bitcoin to Ethereum. However, in light of the renewed whale interest in Bitcoin, positive signs seem to finally be back on the table for the king coin.