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The number of Bitcoin whales is declining, and could be a bullish indicator


As we know, Bitcoin has been trading laterally for practically the past three months and continues to be flat despite small spikes here and there. Now it is important to look at other metrics in addition to technical analysis tools and indicators.

Fundamental metrics play a huge role in the development of Bitcoin's price and value. Not everyone follows them, but they can be extremely useful in the long run. Recently, thanks to a new Glassnode report, we are noticing a significant decrease in the number of Bitcoin whales.

A whale generally refers to anyone who owns a large portion of an asset, in this case, the metric is for any address that owns more than 10,000 Bitcoin. Of course, there are not many addresses containing this number of coins, however in July 2019 there were 120 and now there are only 103. This is quite significant as 17 fewer addresses mean that at least 170,000 BTC moved or sold.

Of course, this metric can't really show whether the addresses simply split their Bitcoin into other addresses or sold it, however we can assume that most of them simply sold their coins. While at first glance this may seem like a bearish indicator, it may not be that bad.

In fact, if we carefully examine this metric using another metric, the number of active addresses, we can easily understand if it is wrong or not. The idea here is that if fewer people control a large part of Bitcoin's supply, Bitcoin becomes more decentralized. At the same time, this should be considered bad news because it also means that people are no longer willing to hold a large amount of Bitcoin, however, as the number of active addresses is increasing, the metric becomes bullish.

Again, it is important to take a step back and realize that these types of metrics do not have a direct impact on the price of Bitcoin or, rather, do not have an immediate effect on it.

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