Bitcoin’s market has been witnessing the activity of large holders who have been actively accumulating more Bitcoin over the past two months. While the BTC’s price appeared to dwindle in recent times, wallets holding substantial amounts of Bitcoin, known a Bitcoin whales, have amassed a combined total of $3.5 billion since early April.
Is Bitcoin A Good Investment?
Since its creation Bitcoin price has risen by unbelievable 47695007.14% in 13 years. This makes Bitcoin one of best performing asset with returns much greater Gold or stocks. Prominent global companies like Tesla and MicroStrategy hold Bitcoin on their balance sheets. Not only these prominent celebrities like Elon Musk, Robert Kiyosaki etc. are advocates of Bitcoin.
Bitcoin price rally in 2017 was largely driven by the ICO craze kicked off by Ethereum and a focus on altcoins.
While the 2023 YTD price increase is driven by institutions and large wallet investors, the 2017 cycle was largely supported by retail traders.
Profit rotation from altcoins drove a Bitcoin price rally in 2017, while DeFi-related assets take the centre stage in 2023.
Bitcoin (BTC) price cycles are structured around halving events that occur once roughly every four years, when rewards to miners are cut in half. The next BTC halving is expected in early 2024, and evaluating the differences between the 2015 to 2017 and 2020 to 2023 Bitcoin cycles can help traders define their expectations and prepare for the bull run.
WHO PURCHASED BITCOINS 10 YEARS AGO?
In 2013 The anonymous whale, who goes by the name “unknown,” reportedly purchased BTC in 2013 and has since held onto it for nearly a decade. This strategic move has paid off handsomely for the whale, as BTC has seen tremendous growth since its early days.
Bitcoin price cycles and whale activity comparison
Bitcoin’s massive price rally in its 2015 to 2017 cycle set a record. However, the 2020 to 2023 cycle, which sent BTC to an all-time high of $69,044, has different catalysts and players. Still, the two Bitcoin price cycles followed a similar trajectory: it started with a bullish catalyst that was followed by capital rotation into BTC and massive participation from key players in the ecosystem.
The two cycles, however, differed in terms of the role played by retail and institutional traders, as well as activity of large wallet investors, popularly known as whales, in the Bitcoin ecosystem.
The 2015 to 2017 Bitcoin price cycle is considered one of the most iconic ones and can be summarized as follows:
- Initial Coin Offering (ICO) spree initiated by Ethereum.
- Altcoins, shitcoins and everything in between.
- Capital rotation into Bitcoin.
Bitcoin price rally to $19,665 in mid-December 2017 was fuelled by a massive participation of retail investors.
Bitcoin whales dropped BTC price in 2017
Based on data from crypto intelligence tracker Sentiment, there was a consistent rise in the number of large wallet addresses holding more than 1,000 BTC.
- At the beginning of 2015, there were 13,903 addresses holding between 100 and 1,000 Bitcoin,
- 1,438 addresses containing between 1,000 and 10,000 BTC
- and 90 wallets holding between 10,000 to 100,000 Bitcoin.
All three segments of large wallet investors on Bitcoin witnessed a consistent increase from 2015 to the 2017 cycle top, after which there was a notable decline.
The 2015 to 2017 Bitcoin cycle in a glimpse
In 2017, Bitcoin acted as a gateway for market participants to jump in on the Initial Coin Offering (ICO) craze, where traders exchanged BTC for altcoins and the popularly known shitcoins, currencies with little to no discernible purpose and low value. This fueled a massive spike in demand for Bitcoin and acted as a catalyst for its price rally.
The following chart from TradingView puts Bitcoin’s dominance into perspective and signals a massive decline after the 2017 bull run, at a moment when altcoins gained relevance and popularity. In the 2015 to 2017 cycle, capital rotated from altcoins to Bitcoin, giving the flagship cryptocurrency an edge over the others, but this changed at the cycle’s end.
Bitcoin’s dominance fell down from nearly 100% at the starting of 2015 to just over 96% in 2017.
Bitcoin Whales Get Active
The activity of these ‘ancient Bitcoins’ has picked up quite a bit in the first half of this year. 3,200 coins have emerged from dormancy since the start of 2023, 1,100 of which date back to 2013. A Satoshi-era address recently moved 412 BTC worth $9.6 million.
Coin movements from ancient wallets are often considered to be a bad indication. It can imply that the owner is moving the BTC to an exchange in preparation for selling at a massive profit. Sales of this volume could significantly impact pressuring the market Bitcoin price. However, holders occasionally transfer their Bitcoin to new addresses for safekeeping.
According to analysts at Glassnode, there is a lower chance of holders selling their Bitcoin after 155 days. According to data from Into the Block, 69% of Bitcoin addresses now have a weighted average holding period of over a year.
A recent survey also revealed that the number of Bitcoins retained for a long time is increasing by 100,000 every month.
WHAT CAN BE HAPPEN IN 2023
As per the SANTIMENT a market intelligence platform, Bitcoin whales have been actively accumulating more Bitcoin amidst the price decline witnessed in recent months. Wallets holding between 1,000 and 10,000 BTC have collectively acquired a staggering $3.5 billion worth of the cryptocurrency since the first week of April.
In mid-June after crashing down following lawsuits and regulatory uncertainty. Looking back over the past few months, the cryptocurrency reached a recent high of $30,404 on April 14, 2023, but also experienced a significant dip to $20,187 on March 11.
Bitcoin and altcoins were negatively affected by the recent events and experienced sharp decreases.
While some investors remained in the opposite direction in these decreases, some investors took the opportunity to buy from the levels they saw as the bottom.
In this context, evaluating the movements of whales in recent declines, Santiment said that whales have accumulated Bitcoin.
While the BTC price seems to have been dropping lately, Santiment noted that wallets holding significant amounts of Bitcoin, known as whales, have accumulated a total of $3.5 billion since the beginning of April.
“Bitcoin whales have been busy as the cryptocurrency community has watched prices drop over the past two months.
Because wallets holding 1,000 to 10,000 BTC have accumulated a total of $3.5 billion worth of Bitcoin since the first week of April.
Now, BTC has once again climbed above $27,000.
This BTC accumulation typically points to a positive outlook as whales tend to take a long-term view and can predict future price growth.”
Santiment also said in another post that the increase in BTC whale transactions and Blackrock’s spot Bitcoin ETF application are positive for the BTC price.
The data reveals a notable spike in accumulation by Bitcoin whales, with their holdings rising from around 4.51 million BTC in early April to nearly 4.65 million BTC at present.
Bitcoin’s recent performance is positive, as it tags the first red region and demonstrates strength. However, a small pullback in the upper green region may occur, and failure to hold this level could bring the lower green region into play. The depth of this correction will provide insights into the potential strength of the ongoing impulsive move on lower timeframes.
Bitcoin’s current price stands at $28,925.70, reflecting a 0.36% increase in the past hour, a 8.03% increase over the past 24 hours, and a 11.35% increase over the past week.
Bitcoin Price Daily Chart
The Bitcoin price rising for three consecutive days has reached the current trading price of $26726 A bullish crossover between the weekly 20 and 50 EMA flashes a buy signal for interested traders. The intraday trading volume in Bitcoin is $8.93 billion, indicating a 38% loss.
The weekly time frame chart shows the two monthly corrections in Bitcoin price are associated with weak volume activity. The downward price action backed by low volume reflects the lack of conviction from sellers which in contrast indicates the buyers are likely to retake trend control.
In addition, the correction phase is still above 50% Fibonacci retracement levels indicating the pullback is healthy in terms of overall bullish trend. As of now, a falling wedge pattern governs the ongoing downfall, and therefore a breakout above its resistance trendline will signal the resumption of prior recovery.
By the press time, the Bitcoin price traded at $26700, if the buyers gave a daily candle closing above the trendline, the potential buyers can look for an entry opportunity, with the expected rally to the $31555 mark.
Will Bitcoin cross the 31000 mark?
Amid the ongoing correction, the weekly chart shows alternative red and green candles reflecting no completion dominance from sellers. Thus, if the market sentiment shows improvement in the second half of June, the price could breach the overhead trendline. The post-breakout rally could push the price to $28500, followed by $29800 and $31155.
Relative Strength Index: The weekly RSI slope still above the 50% mark projects the market trend to remain bullish.
Exponential Moving Average: the BTC price dipped to 20 EMA slope which is the same level that initiated the Mid-march recovery.
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