Significantly, whales have been buying more Bitcoin since Christmas. It means that high-net-worth investors continue to reduce the supply of the world’s largest cryptocurrency.
It is almost impossible to separate institutional investors from individual investors through on-chain data. Significantly, according to analysts, investors with large capital are increasingly entering into the BTC market.
However, the interesting question is, why are whales resuming to buy more Bitcoin?
Notably, Santiment’s analysts announced that about $647 million worth of Bitcoin shifted from small addresses to large addresses.
Significantly, many analysts consider those addresses holding more than 1,000 Bitcoin or more to be whales. Since 1,000 Bitcoin equals more than $27 million (Bitcoin’s current price stands at $27,100).
The dominant cryptocurrency has almost tripled since mid-2020, and the upside for Bitcoin is arguably limited in the short-term.
However, it is worth noting that most on-chain data points prove that fewer whales are selling across major exchanges. According to CEO at CryptoQuant, Ki-Young, Bitcoin whales appear exhausted to sell, and hardly any whales are depositing to exchanges. Ki-Young says that this bull-run will resume as institutional investors keep buying and Exchange Whale Ratio keeps below 85%.
Two main reasons why whales might be acquiring BTC
Remarkably, there are two main reasons why whales might be getting BTC at the current price range.
First, notwithstanding Bitcoin’s enlarged rally, whales might think that the psychological barrier at $30,000 will break. If this happens, options data suggests $36,000 could be a likely target in the near term.
Second, there is no reliable reason to expect a major correction coming, apart from the CME gap and the high futures market funding rate.
However, if Bitcoin consolidates after each rally, the funding rate would normalize as seen in the past two days. When that occurs, the derivatives market would be less overheated, increasing the probability of a new rally.
Byzantine General, a pseudonymous trader, announced that the market is giving conflicting signals. He said that both long and short contract holders are aggressive, making both a long and short squeeze possible.
Furthermore, Bitcoin’s price on Coinbase is higher than Binance and other exchanges. In the past week, the dominant cryptocurrency has been trading lower on Coinbase (by about $20 to $30).
Although the gap is small, it explains that the U.S., which drove Bitcoin’s rally during December, might be seeing slowing buyer demand. Nevertheless, the Asian market and the derivatives market are seeing a rise in buyer demand.
