Bitcoin Whales Seize the Opportunity, Acquiring 47,000 BTC in a 24-Hour Span
Published: May 3, 2024, 18:22 EDT
Reading Time: 1 minute
Image Source: Midjourney
While many segments of the market were in a panic, selling off their Bitcoin (BTC) this week, the largest players in the digital currency space, known as Bitcoin whales, took advantage of the situation and bought up the dip.
Whales Take Advantage of Bitcoin Dip
According to data provided by CryptoQuant CEO Ki Young Ju, active Bitcoin whale addresses accumulated a staggering 47,000 BTC in just 24 hours after the price of Bitcoin dropped below $57,000 per coin.
An active whale address is defined as an address that owns at least 100 BTC and has engaged in on-chain activity within the past 24 hours. Young Ju explained that the balances exclude centralized exchanges and Bitcoin miners, but include certain Bitcoin custodians such as Bitcoin ETF providers.
“We are witnessing a new era,” Young Ju tweeted about the data. Although whale balances have been increasing significantly since Bitcoin spot ETFs were approved in the United States earlier this year, the CEO clarified that this week’s surge in balances was not related to ETF activity.
The day before, Young Ju had pointed out that new Bitcoin whales, including spot ETF buyers, had fallen into negative territory on their investments when the price of Bitcoin plummeted below $60,800.
Similarly, Glassnode analyst James Check conducted an analysis and found that the average cost basis for short-term Bitcoin holders as of Wednesday was $59,600. Statistically, short-term holders are more likely to panic sell their holdings once their cost basis is lost, which further exacerbates price volatility.
Despite this, Check also stated that the dip was of a typical size seen in Bitcoin bull markets and predicted that it would be a good time to buy. As of Friday, Bitcoin has surged back up to $62,700, proving to be profitable for those who followed his advice.
Interpreting the Data
According to analyst TXMCtrades, the increased balance in whale addresses may not necessarily indicate whales accumulating more coins, but rather reflect “innocuous wallet management flow” among larger entities.
“There are hundreds/thousands of unidentified on-chain entities with significant activity, but people who don’t analyze this data regularly may jump to wild conclusions,” TXMCtrades tweeted on Friday.
Bitcoin ETF data also reveals that the Grayscale Bitcoin Trust (GBTC) experienced net inflows on Friday for the first time since its launch as a Bitcoin spot ETF. This may indicate the first strong inflow day for Bitcoin ETFs in nearly a month.
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