Bitcoin Whale Activity Surges amid Market Dip: Details

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As a seasoned crypto investor with over five years of experience in this volatile market, I find myself neither panicked nor surprised by the recent dip in Bitcoin value. Instead, I view such periods as opportunities to accumulate more BTC at lower prices. The data provided by Santiment and CryptoQuant, showing increased whale transactions and long-term holder accumulation during this downtrend, only reinforces my belief that the market is moving towards a bullish phase.

As a researcher observing the cryptocurrency market, I noticed a significant drop in Bitcoin‘s value below the $50,000 mark on August 5 and 6, causing a wave of apprehension across the industry. While some investors succumbed to panic, experienced market players saw this as a potential opportunity. Intriguingly, according to onchain data, the number of Bitcoin whale transactions peaked at levels not seen since early April during this timeframe, suggesting these seasoned players might be capitalizing on the dip.

According to a recent update from Santiment, these wallets containing between 10 to 1,000 Bitcoins have been actively buying when the price dipped down to approximately $48,800.

On the 5th and 6th of August, there were the most significant transactions involving large Bitcoin holders (whales) since the initial week of April.

During the prolonged slump, Bitcoin recorded approximately 5,738 high-value transactions exceeding $1 million each, along with an additional 28,319 significant transactions worth more than $100,000.

Furthermore, it’s worth mentioning that the practice of amassing Bitcoin wasn’t confined to just a few days; instead, it has been ongoing for the past month. In this period, the number of long-term Bitcoin holders has significantly increased their stash by approximately 404,000 BTC, which equates to more than $23 billion. This total includes 40,000 BTC that were acquired through spot Bitcoin ETFs. However, it’s crucial to point out that the accumulation via ETFs didn’t occur during the recent price drop, as these investment funds experienced an overall withdrawal of $554 million from August 2nd to the 6th.

According to Ki Young Ju, the CEO of CryptoQuant, these statistics indicate a significant accumulation during this drawn-out correction spanning over a month. Notably, there’s no intense selling pressure from veteran Bitcoin holders—those who have possessed BTC for more than three years—as they appear to have transferred their holdings to newer whales between March and June instead.

Currently, data from CryptoQuant indicates that the amount of Bitcoin stored on centralized exchange platforms is at a record low for several years. Large Bitcoin holders (those with over 1,000 BTC) have been withdrawing their assets from these exchanges more frequently than any other time since 2015. This pattern suggests a preference for self-custody, which could indicate that long-term investors are less inclined to sell their Bitcoin and instead remain invested in the largest cryptocurrency.

What’s Next?

After experiencing a significant dip, Bitcoin has been consistently hovering between $55,000 and $57,000. Furthermore, its market value has significantly increased. On August 5, it was worth approximately $951 billion, but today it stands at around $1.12 trillion. Also, US ETFs that focus on the spot market ended a three-day streak of outflows by attracting an inflow of about $45.14 million on August 7.

Even though the current recovery, Arthur Hayes, a co-founder of BitMEX, anticipates that the cryptocurrency market may experience another drop in the near future. Furthermore, the sale of Ethereum by Jump Trading on Wednesday could increase selling pressure, potentially leading to more selling.

“During this downturn, there seems to be a lack of ETF buyers, along with continuous selling pressure from multiple sources, which is causing quite a worry in market analysis by the research firm 10x.”

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2024-08-08 12:29