Data recently released by glassnode shows that there are currently over 1,800 Bitcoin (BTC) whales. From a macroeconomic perspective, this increase in the number of whales can be seen as bullish.
The term “whale” is used in the crypto industry to describe a particular investor who has a large amount of BTC. Whales are usually the first Bitcoin investors or millionaires to enter the crypto market recentlyWhen institutional investors enter the market, the boundaries of the term may be expanded to include new companies.
The number of BTC whales has increased significantly since March. Source: Glassnode
Why is an increase in the number of whales a positive sign of Bitcoin?
Some analysts believe that a large number of whales are not ideal in the cryptocurrency market. Because you can concentrate the market in the hands of some market makers who have an impact on liquidity.
Also, If some investors maintain a large portion of an asset’s offer, it can increase the risk of a serious correction if there is a bulk sale between whales.
Glassnode explained this, however The whales’ average Bitcoin balance has actually decreased. The data also show that the highly centralized group of whales has diversified in recent months.
If the amount of bitcoin held by the whales increases, this could increase the concentration of supply with fewer investors. But if the amount stays the same and the number of whales increases. This is an indication that there are simply more investors with a large amount of BTC.
According to Liesl Eichholz, author from the Glassnode report:
“The average bitcoin balance of each whale actually decreases slightly, in other words, the individual whales don’t get richer on average, but there are more of them.”
The origin of the new Bitcoin whales supports the argument that an increase in their numbers is a positive trend. Eichholz explained: The new whales are not necessarily new investors who came to the market in 2020. Instead, they are investors who have chosen to withdraw their money from the exchanges, possibly to store it cold or in private purses.
The shift of funds from exchanges to personal purses could indicate this In the short term, less appetite for sales or trade.
Whales could expect strong Bitcoin price developments in the medium and long term. and that’s why they make BTC wait for a bull market. Eichholz explained:
“Where did all of these new whales come from? Much of the recent surge is due to millionaires pulling their BTCs off the stock exchanges. Apparently this is not new wealth, it is a change in the way Bitcoin whales use their currencies hold. “
Whales probably bought below on March 13th
On March 13, the price of Bitcoin fell below $ 4,000 after settling futures contracts over $ 1 billion. Oak wood noticed, that The whales could have bought in the fall of March. And now they are moving funds with a long-term investment strategy to safer storage.
According to Glassnode:
“While there is no simple explanation as to why these big owners have withdrawn their BTC from the exchanges, the graph in Figure 9 (Bitcoin withdrawals from the exchanges) suggests that the whales may have Black Thursday as an opportunity in the Get in funds and then withdraw your Bitcoin from HODL in the long term, pending the next bull run. “
Bitcoin withdrawals on the exchanges increased sharply in March. Source: Glassnode
end of March Bitcoin withdrawals from cryptocurrency exchanges increased tremendously. This coincided with an increase in the number of whales, suggesting that wealthy investors were aggressively buying during the 60% decline in the first quarter of 2020.
In the medium term, The whales’ resistance to selling or trading Bitcoin at the current price level can lead to a new upward trend, which is complemented by a decrease in selling pressure.