A new bull market in Bitcoin? The data shows that whales and institutions are hoarding bitcoin
Source: Cointelegraph
By JOSEPH YOUNG
The data shows that whales are not selling a lot of bitcoin at current BTC prices, and that institutions are hoarding BTC.
On September 19, whale activity and record Bakkt turnover suggested momentum was building as the price of Bitcoin (BTC) broke through $11,100.
Bitcoin's 4-hour price chart & NBSP; Source: TradingView.com
According to Ki Young Ju at CryptoQuant, the number of whales sending bitcoin to exchanges has declined. Historically, the data indicates low selling pressure from high net worth bitcoin holders.
Meanwhile, daily trading volumes on Bakkt's institutional-centred Bitcoin futures market hit an all-time high. Bakkt is run by ICE, the parent company of the New York Stock Exchange (NYSE), and facilitates bitcoin trading for institutions.
Bitcoin whale activity and record Bakkt transactions suggest that both whales and institutions may be hoarding BTC.
Market data showed an optimistic trend, with Bitcoin continuing to test $11,000
Whales and institutions have a huge impact on the price of Bitcoin because of the size of their transactions.
One whale that sold bitcoin for more than $12,000 after holding it for two years had about 9,000 BTC. At its current market price of $11,070, bitcoin is close to $100 million.
The reduced demand for whale BTC sales is a positive factor, given the reduced risk of large sales orders. Ki said.
"The exchange's whale ratio hit an annual low, the fewer whales move to the exchange, the less selling there will be and the higher the BTC price will be."
What's next in the short term?
Some traders say there may be a post-profit-taking rally on top of institutional investors and whale stocks.
In recent months, the decentralized finance (DeFi) market has outperformed mainstream cryptocurrencies, such as BTC and Ethereum (ETH). With the strong performance of DeFi scrip, investors are likely to recycle profits into BTC and stabilisation.
Anonymous trader "Light" said:
"I sold all ETH and shanzhai COINS last week to convert to BTC and legal tender. Almost everyone is underexposed to Bitcoin and DeFi is overexposed. When everyone is standing on the side of the ship."
Bitcoin dominance Index & NBSP; Source: CoinMarketCap.com
If the trend continues, then DeFi tokens may underperform BTC in the short term. This is likely to reinforce BTC's growth trend, at least for the foreseeable future, as bitcoin's dominant index has fallen to annual lows in recent months.
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