In recent weeks The number of Bitcoin (BTC) addresses with more than 1,000 BTC, often referred to as “whales”, rose rapidly to around 2,088. This trend started shortly after the price of Bitcoin fell to $ 3,600 in March.
The data is relevant as historical data suggests it Aggressive accumulation by big investors is usually a sign of a new bull cycle.
For the past six years Bitcoin has experienced periods of inverse correlation between phases of whale accumulation and the price of BTC. Every time the number of addresses with significant amounts of BTC decreased, the BTC price would decrease.
Positive data in the chain creates optimism for Bitcoin
Whales tend to follow the areas with the highest liquidity as they deal with large amounts of Bitcoin. When whales believe that the price of BTC has peaked, they sell quickly, causing the number of major addresses with BTC to decrease.
For example in early 2018 After the price of Bitcoin hit $ 20,000, the number of Bitcoin addresses dropped to 1,000 BTC ($ 11 million) to a level not seen since 2014.
Another on-chain metric, not limited to whales, suggests that investors are generally hoarding more Bitcoin than before. Glassnode found that addresses that have never issued BTC but have been active for the past seven years have increased significantly since 2018.
Researcher they write::
“There are more than 500,000 # Bitcoin accumulation addresses with a total of 2.6 million BTC accumulation addresses (~ 14%): You have more than 2 shipments [transacciones] Incoming, they never issued BTC, they have been active for the past 7 years (which represents lost coins), exchanges and miners are excluded. “
The number of Bitcoin accumulation addresses. Source: Glass knot
While both data points are recognized as bullish trends, it’s also important to note that they have been increasing steadily over the past decade.
It’s difficult to determine if this data is good for BTC’s short-term price cycle. However, indicates a healthy long-term growth trend for Bitcoin.
Fundamentals complement strong on-chain data. What’s next?
In addition to data suggesting an accumulation phase for Bitcoin, several fundamental factors point to stability in various industries.
The Bitcoin blockchain network hash rate steadily hit all-time highs despite halving on May 11th. This indicates that the price of BTC is high enough for the miners to remain profitable.
Bitcoin and ether balance on exchanges. Source: Glass knot
Trading activity on major exchanges and regulated futures markets such as CME also remains high. However, BTC reserves on the exchanges have plummeted compared to previous bull cycles.
The trend towards high trading activity and low BTC stocks suggests that investors are likely to buy rather than sell BTC on exchanges. Rafael Schultze-Kraft, Technical Director of Glassnode, said::
“Previous exchange rates: BTC: -9.6%, ETH: + 10.4%”.
Given that most retail investors use spot cryptocurrency exchanges, while institutions use regulated investment vehicles and some whales use OTC exchanges, the data suggests that both retailers and whales appear to be hoarding bitcoin.