Bitcoin’s deep-pocketed investors do this, but should you
Bitcoin has just entered its sixth day of relatively low activity as it hovers within a 9-week rising support line. The current performance underscores the heightened state of uncertainty, especially after the bearish performance it delivered last week.
In most cases, the smart money makes moves while the retail market waits for clarity on market direction. Perhaps a look at what some of the heavy hitters in Bitcoin’s realm might provide insight into the potential market performance.
Evaluation of institutional demand
It makes sense to look at what institutions are doing since they often have strong purchasing power and influence over the markets. The Purpose Bitcoin ETF holdings proved to be a reliable indicator for measuring institutional demand.
It is here to note that the Purpose Bitcoin ETF holdings have been offloading BTC since August 13. However, it smoothed out the selling pressure on August 23 and has been accumulating a little since.
To put that in perspective, the Bitcoin balance increased by 95 BTC between August 23rd and 24th. The amount of BTC it added to its balance during the said period was worth approximately $2.06 million.
Source: Glassnode
Whales eat
It turns out that whales have also taken advantage of the small discount that occurred after last week’s crash.
They may also have contributed to the sales pressure. Addresses with more than 1,000 BTC trimmed their balances between August 14 and 20.
About eight new addresses added to the list of addresses within this bracket from August 20th to today. However, it is difficult to quantify the amount of BTC owned by these addresses.
But just the eight addresses with over 1,000 BTC means they collectively control over $1.6 billion at current market value.
Source: Glassnode
Bitcoin’s Demand Pressure
Also, Bitcoin receiving addresses had a sharp drop between August 19 and 21.
This was the highlight of last week’s bear market. However, a sharp pivot was observed a day later, confirming the return of strong bullish demand.
Unfortunately, the level of demand has not had the same momentum in the last two days. This may explain the lack of a strong recovery despite the previous downside.
Source: Glassnode
It would be uncharacteristic of whales to buy when the market is heading more to the downside.
In this case, the whales and institutional investors are buying. This may reflect the improved outlook, but investors should note that the trajectory can change at any time.
The volatile nature of the market could potentially flip the switch in favor of the bears and this reflects the cautious narrative currently observed in the market.
