Bitcoin Whales Underwater as Markets Mirror in Late 2018

In its ‘Week on-chain’ report on November 21, blockchain analytics firm Glassnode reported that recent market weakness has “shaken the confidence of Bitcoin holders.”

It measured aggregate increases in average inflow volume to interchanges to determine that more whales are now underwater. The report noted that the average deposit size across all major exchanges is increasing in dollar terms as a cycle bottom forms.

The trend has been in place since May and it reflects the 2018/19 bear market cycle.

“This indicates that entities such as whales, institutions and trading companies have had a greater dominance across currency deposits.”

In the wake of the FTX fallout, confidence in both #Bitcoin Whales and long-term holders seem shaken

With over 84k $BTC distributed by LTHs, and ~5k $BTC in net whale prey occurrences, #Bitcoin the markets are on shaky ground.

Read our latest analysis👇

— glassnode (@glassnode) 21 November 2022

Old hands weaken

At the depth of the previous bear market, Bitcoin prices were down 84% from record highs. It took just under a year for the asset to crash from $20K to $3.2K in November 2018.

This time it has taken about the same amount of time for it to dump 77.3% from $69K to a new cycle low on November 22 at $15,665.

Some analysts believe there is further to go as it took several months after the capitulation in 2018 for any measurable momentum to emerge. It was five weeks before the bottom was hit in 2018 after the capitulation began, and we are only in the second week this time.

$BTC Did you know it took 5 weeks to finally bottom out when we started capitulating in 2018?

Then it took 4 months of BORING PA before we saw the first light of God.

We barely started week 2 today.

This is a marathon, not a sprint. Get comfortable, it will take a while. pic.twitter.com/H9Yu8D2fUY

— Bleeding Crypto (@Bleeding_Crypto) 21 November 2022

Glassnode added that with spot prices around $16K, it is the first time since March 2020 that the whale cohort has had an unrealized loss. It considers a whale as a wallet containing more than a thousand BTC.

Additionally, last week saw the fourth largest increase in realized losses with a daily value of -$1.45 billion.

An increase in the use of coins by old hands is “often a signal of reduced conviction, fear and capitulation among this more experienced group,” it observed.

Bitcoin Dumps to New 2022 Low

BTC prices have fallen to their lowest levels this year and in this market cycle. In early Asian trading on November 22, Bitcoin hit a low of $15,665, according to CoinGecko. It lost 2.6% on the day and was trading at around $15,881 at the time of writing.

The asset has fallen 23% over the past fortnight as the broader crypto market slides deeper into crypto winter.