The biggest Bitcoin sell-off to take the market by storm had been circling the crypto community this week. Remember that an analyst had hinted before the event that the arrival of the Asian bulls could shake the market. Therefore, price dumping was imminent. The new data has now revealed that there was a large sell-off by retail merchants, which has now resulted in an increase in accounts with more than 1,000 Bitcoins.
The number of addresses holding at least 1,000 #Bitcoin has hit an all time high during this recent sell-off, while addresses holding <0.01 BTC dropped by 10,000.
This indicates that whales bought the dip while retail sold off. pic.twitter.com/4z4UCTvahb
– Bloqport (@Bloqport) January 13, 2021
The data below shows a huge difference in those numbers in a very short period of time. On day 4, we see that there were fewer than 2,100 whales. A week later, we are seeing the numbers at a new all-time high.
The price drop caused panic among retail traders who rushed to sell their Bitcoins to curb market risks, while the whales conveniently took advantage of the drop and pounced on a few more Bitcoins.
Whale hoarding is a long-term investment strategy that has benefited investors over the years. Unlike retailers, whales do not intend to sell their Bitcoin right away, because unlike daily traders, losses do not threaten their asset holdings.
Clearly, the whales of 2021 are awake and active, but the older whales are not asleep either. As revealed by on-chain analytics platform Glassnode, the 3-year-old whales are still active in 2017 and do not intend to cash out soon.
The Glassnode CTO who revealed the data via Twitter is quoted below, saying;
“Were the Bitcoin investors who bought the top of 2017 desperately waiting for the new ATHs to pull out and go?
I do not think so.
The supply of BTC for the last 3 or more active years (includes the 2017 high) is at 35%, continues to rise and shows no signs of slowing down. "
Although the whales are present, institutional demand has not yet recovered. Institutions have apparently yet to fully resume from the holidays, hence the stagnation in the entry of Bitcoin to trust fund accounts. Once institutional activities resume, analyst Joseph Young notes that a bullish rally is in sight.
Young it states;
“The ElGrayscale Bitcoin Trust has not reported any additional entries since Christmas (Dec 25, 2020) due to the holiday season / end of the year.
When BTC inflows start to arrive, indicating institutional demand, is when Bitcoin could start to rally again. It is worth watching. "
Meanwhile, Bitcoin is repositioning to return to $ 38,000. At press time the price is at $ 37,527, but analysts generally forecast a correction.