Key Points
- Bitcoin’s supply held by whales has reached a six-year low, indicating a significant shift in market dynamics.
- Despite whale selling, the overall market demand for Bitcoin remains high, suggesting possible price stability.
The past month has seen a 12.90% decline in Bitcoin value. Additionally, the amount of Bitcoin held by large investors, known as whales, has seen a significant drop. The supply of Bitcoin held by these whales has reached its lowest point since 2019, marking a six-year low.
Whale Selling and Market Dynamics
When the supply of Bitcoin held by whales drops this low, it indicates a significant change in market dynamics. It suggests that these large holders are actively selling, possibly due to declining prices or in anticipation of other buying opportunities. This shift in supply dynamics could mean that whales are redistributing to retail investors, leading to greater decentralization and reduced whale-induced market trends.
The high market demand for Bitcoin, despite whale selling, suggests a broadening investor base. This is critical for price stability. The netflow of Bitcoin on exchanges indicates that market demand remains high, with more outflows than inflows.
Bitcoin’s Future Price Movement
Although whale supply has declined, Bitcoin is not experiencing high selling pressure. The fund flow ratio to exchanges has also been declining, indicating that current holders are not planning to sell. This signals long-term holding behavior and continued accumulation of Bitcoin.
As a result, if whales are selling while other investors continue to hold, it suggests that markets will continue to consolidate as buyers absorb selling pressure without driving prices up.
For consolidation to continue, Bitcoin must consolidate above $84,640. If it manages to do so, it could form a local bottom before pushing to new all-time highs. However, if Bitcoin remains below $84K for several days, the next target is $64,700, which aligns with the April 2021 all-time high.
