As an experienced analyst, I find Ki Young-Ju’s analysis intriguing and well-supported by data. The comparison he draws between Bitcoin’s market behavior in mid-2020 and the current state is noteworthy. The charts illustrating the realized cap for new whales provide valuable insights into the undercurrent of large volume transactions happening outside public exchange networks.
The CEO of CryptoQuant, Ki Young-Ju, highlighted striking resemblances between Bitcoin‘s market pattern in its current phase and mid-2020, which was characterized by flat price levels but elevated on-chain activity. Young-Ju reinforced his analysis using two charts, presented in a post on X, indicating a strong underlying presence of large transaction volumes that might not be reflected in public exchange data.
The initial graph displays Bitcoin’s price in conjunction with the realized cap for new Bitcoin whales, a unique metric that monitors the collective worth of recently purchased Bitcoins by major investors when they last transferred them. This alternative form of market capitalization evaluates every UTXO based on the cost at which it was previously transacted, instead of its current market value. Consequently, this metric reveals the genuine worth of all coins circulating in the network, rather than their present market valuation.
As a crypto investor, I’ve noticed an intriguing trend in the value of this particular asset. Around mid-2020, when Bitcoin seemed stuck in a rut and was trading consistently around $10,000, there was a sudden surge. Looking back, it appears that this period was marked by significant on-chain activity. Further analysis revealed that much of this activity involved over-the-counter transactions between institutional investors.
As an analyst, I’ve noticed that in the second chart, which extends to 2024, there is a consistent pattern with accelerated growth in the realized cap for new Bitcoin whales, even as the price of Bitcoin has remained relatively stable for approximately 100 days. This trend suggests a substantial influx of around $1 billion per day into these large Bitcoin wallets, commonly associated with institutional or affluent individual investors.
What This Means For Bitcoin Price
Ki Young-Ju expanded upon his observations, stating, “Bitcoin exhibits a similar feeling as mid-2020. At that time, Bitcoin stayed around the $10k mark for six months, featuring significant on-chain activity, which was later disclosed to be Over-the-Counter (OTC) transactions. Currently, price volatility is low, yet on-chain activity persists at a high level, with approximately $1 billion being added daily to new whale wallets, presumably for custody purposes.”
He also pointed to a tweet from last September as evidence for his interpretation, mentioning that “the amount of Bitcoin transfers reaches an annual peak, and these transactions aren’t from exchanges. The exchange Fund Flow Ratio hits its lowest point of the year. Something significant is unfolding. It could be OTC deals.”
The consistent increase in new whale investments and the maintained high cap levels suggest that large-scale investors have been steadily accumulating cryptocurrencies, much like they did during mid-2020. These actions are typically not evident on standard crypto exchanges and signify a robust institutional interest that may lead to substantial market shifts in the future. As a result of Young-Ju’s tweet, Bitcoin experienced a remarkable price surge of approximately 480% from September 2020 to November 2021.
If the price of Bitcoin continues to stabilize, a potential price surge may be on the horizon based on the increasing number of new large-scale Bitcoin investors and the sustained value of the cryptocurrency. Historically, these conditions have preceded significant market shifts as the accumulated Bitcoin holdings of new whales have influenced the broader market through heightened liquidity or renewed trading activity.
At press time, BTC traded at $68,271.
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2024-05-31 10:17