Bitcoin whales’ on-chain activity slows; What does it mean for BTC?
Amid the extended crypto bear market, monitoring the whale activity of assets like Bitcoin (BTC) has become a crucial metric to track for hints of the next possible price action.
Along these lines, Bitcoin’s on-chain whale activity has slowed in recent weeks as the BTC price consolidates around the $20,000 level.
Notably, as of October 23, Bitcoin whale transactions involving 100 BTC stood at 106, representing a drop of around 86% from the 813 transactions recorded on July 25, according to DataPool data.
Implication of dropping whale transactions
It is worth noting that most Bitcoin whale transactions are usually responsible for sudden price fluctuations in the crypto space. Varying whale activity points to a possible bullish or bearish price action. In fact, it can also signal market volatility if the number of transactions increases.
Therefore, the falling Bitcoin whale activity has come as the flagship cryptocurrency has appeared to stabilize in the $19,000 – $20,000 range. Accordingly, Bitcoin has continued to record reduced volatility.
Furthermore, analysis of the whale activity can give a hint about Bitcoin’s next price action. Historically, an increase in Bitcoin whale transactions during periods of price decline indicates a possible price bottom, while an increase in such transactions during periods of price increases points to a possible price top.
At the same time, it is important to understand the goal of the whale transactions. In this case, when large amounts of Bitcoin are deposited into an exchange, it signals that a whale or high net worth investor is planning to sell Bitcoin and potentially make a profit.
In addition, the decrease in transactions can be interpreted as increased “HODLing” activity, with experienced investors preferring to store their catches in cold wallets away from exchanges.
Bitcoin’s potential breakout
Overall, Bitcoin continues to look for possible rally triggers among the prevailing macroeconomic factors. As reported by Finbold, crypto trading expert Michaël van de Poppe has suggested that a Bitcoin breakout could be in play in the coming week, with several macroeconomic events acting as a key catalyst.
For example, Poppe suggested that the upcoming speech by US Treasury Secretary Janet Yellen could affect the yield and thus the risk of assets such as Bitcoin.
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
