After a violent price reversal last week that saw Bitcoin pulling back from all-time highs, traders and analysts are now watching key players and investors to gauge BTC’s next move – and so far the reaction has been decidedly mixed.
Data from on-chain analysis company Glassnode shows that the number of Bitcoin whales – a term for wallets valued between 1,000 and 10,000 BTC – has at least temporarily reversed the previously strong upward trend from April 2020, a phenomenon that Glassnode sees as a potential “End of the Wallaich season”.
Diagram over Glassnode
However, the Glassnode blog noted that a “significant part” of the decline may have been due to the restructuring of custody wallets. If some of the decline was related to custodians moving coins into deep storage, there is a chance that more BTC could become owned by whales, even if the actual number of coins in whale addresses indicates otherwise. As a result, it can be difficult to mark the decline in whale wallets on panic selling during the crypto and macro market chop.
Mine outflows, meanwhile, paint a more explicit bullish picture.
In a tweet on Friday, Lex Moskovski, CEO of Moskovski Capital, noted that Bitcoin miners – a common scapegoat for price dumps and boogeyman of cryptoTwitter – have actually started collecting coins instead of selling them:
Miners stopped selling and started collecting #Bitcoin
Yesterday was the first day since December 27 that the miner’s position change became positive.
Miners sold their bitcoins for two months.
Bullish. pic.twitter.com/S89iBcz4k3
– Lex Moskovski (@mskvsk), February 27, 2021
There also seems to be good news in terms of institutional accumulation. CryptoQuant CEO Ki Young Ju noted that the amount of BTC in wallets continues to decline – a sign he believes suggests continued institutional demand:
Another significant Coinbase outflow at 48,000. Institutional US investors are still buying BTC dollars.
I think the main reason for this decline is the troubled macro environment like the 10 year Treasury bill, non whale deposits, miner sales and lack of institutional demand. https://t.co/wzwkwMhJWx pic.twitter.com/1uEEF8SX5Q
– Ki Young Ju @ (@ki_young_ju) February 26, 2021
However, some recent research shows that the institutions sucking Bitcoin may not have as much of an impact on price as originally thought. Additionally, the indicators suggest that the retail craze has barely started – a sign that the recent pullback may only be temporary, and the next surge is where FOMO will really step in.
At the time of writing, Bitcoin is trading at $ 46,750, down 2% from the day.
