Bitcoin whales have become active once again. While whale activity is normal and to be expected, the rate at which they purchase and accumulate coins can point to further movement in the market. Given that these investors control a large enough volume to affect the price of bitcoin, watching their every move can be beneficial as shown bypass data.
When whales begin moving BTC in large volumes, it can either signal a market dump or pump. In the same vein, it can also who how big money is dealing with the digital asset. These addresses which hold 1,000 or more bitcoin on their balance have significantly impacted the market movement with their accumulation trend in the past. Now, again, they have begun to accumulate.
Bitcoin Whales Are Stocking Up
Santiment has reported that the bitcoin mega whales are coming out of their shells to stock up on more of the asset. These whales who hold at least 1,000 BTC on their balances have taken purchasing bitcoin at a rapid rate. Over the span of 7 days, these wallets have stocked up on more than 220K BTC, almost $10 bitcoin worth of the digital asset.
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This comes at a time when the price of bitcoin had dipped and the market had plunged into extreme fear. This meant that a lot of investors were wary of putting money into the market. But not these whales it seems. In one of the most rapid accumulation trends, these whales have now added a combined 1.06% of BTC’s total supply in a little over a month.
Santiment notes that the last time a rapid accumulation trend like this was recorded was two years ago in December of 2019.
🐳 Mega whales of have accumulated significantly the past 7 weeks. Addresses with 1,000 or more have added a combined 220,000 to their combined wallets since December 23rd, the most rapid accumulation we've seen since September, 2019.
— Santiment (@santimentfeed)
What Happened The Last Time Whales Accumulated?
As with any historical data, the accumulation of bitcoin by these whales has often had a profound impact on the market. Buying such a large amount of BTC in such a short period of time will no doubt have effects on the supply of the digital asset and by extension, the value of the asset.
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As noted in the report by Santiment, bitcoin whales had done the same thing back on December 23rd, 2019. Now, this was a pivotal time for the subsequent bull rally as it had begun in the next year. A significant uptick was noted in the value of the asset following the rapid accumulation by whales. This had seen an uptrend that continued until the market entered a full-blown bull rally.
Whales accumulate BTC before 2020 rally | Source:
This is not to say that a bull rally is expected to immediately follow such an accumulation trend. However, it shows a strong correlation that a trend like this where supply is reduced helps to signal subsequent growth for an asset.
Combined with market sentiment moving out of fear territory into the positive, indicators point towards a continued uptrend. Although only a break above $46,000 would signal that the bull has effectively been triggered.
Featured image from Bitcoin News, chart from TradingView.com
