Original Title: “Whales Accelerate Selling Bitcoin, but is it Still Not a Panic Signal?”
Original author: Jin Shi Data
Source text:
Reprint: Mars Finance
Bitcoin fell below the key $100,000 mark last week, with the recent selling behavior of “Whales” (investors holding large amounts of cryptocurrency) and other long-term holders becoming a significant driver of the recent weakness in coin prices.
Most blockchain analytics companies define a “Whale” as an individual or institution that holds 1,000 or more Bitcoins. Although the identities of most “Whales” are unknown, blockchain data can still provide clues about their activities by tracking their cryptocurrency wallets.
Data shows that some “Whales” have recently accelerated their Bitcoin selling pace. Some analysts indicate that this phenomenon is worth noting, but it may not necessarily be a panic signal. They point out that the recent selling may reflect steady profit-taking rather than panic selling, a pattern consistent with previous bull market cycles.
Martin Leinweber, Head of Digital Assets Research and Strategy at MarketVector Indexes, stated that such dumping may reflect “planned asset allocation.” “Some Bitcoin investors bought in when the coin price was only in single digits and have waited for so long. Now there is finally enough liquidity to sell without completely disrupting the market,” he told MarketWatch.
Despite recent complaints from cryptocurrency bulls about the market's liquidity drying up, the ease of buying and selling Bitcoin has significantly improved compared to ten years ago.
However, analysts at blockchain analytics firm CryptoQuant have expressed concern that the recent dumping by “Whales” coincides with deteriorating market sentiment and slowing purchases, which may put additional pressure on Bitcoin prices. Dow Jones market data shows that this largest cryptocurrency approached $19,400 last Friday, the lowest level since May 6.
Then and Now
Long-term and large holders selling Bitcoin is not unique to the current cycle. Analysts at the blockchain data platform Glassnode wrote in a recent report that there are signs indicating that the recent selling was driven by profit-taking rather than panic.
Specifically, wallets holding Bitcoin for more than seven years and selling over 1000 coins per hour, known as “Whale” wallets, exhibit a regular and uniform selling behavior over a period of time (see the chart below, data as of last Thursday, November 13).
The significance of the 100,000 USD mark
At the same time, Cory Klippsten, CEO of the financial services company Swan Bitcoin, which focuses on Bitcoin and a long-term Bitcoin investor, stated that the large sell-offs by “Whales” in recent months seem to be related to the $100,000 mark for Bitcoin — many early adopters have long viewed this level as a psychological threshold for taking profits.
“Since entering this field in 2017, many early holders I've known have talked about the $100,000 figure,” Klepstin told Market Watch, “For some reason, people always say they will sell part of their holdings at this price.”
Glassnode data shows that since Bitcoin first broke through $100,000 in December 2024, the selling behavior of long-term holders has intensified.
Potential alarm signal
However, CryptoQuant analysts wrote in a recent report that one changing factor is the market's ability to absorb selling. When long-term holders sold Bitcoin at the end of last year and the beginning of this year, other buyers stepped in to support the price, but this trend seems to have changed.
The capital flow of investment products can reflect weak demand - Dow Jones market data shows that as of last Thursday, Bitcoin exchange-traded funds (ETFs) recorded an outflow of $311.3 million for the week, expected to be the fifth consecutive week of outflows, marking the longest consecutive outflow period since the week ending March 14 (when there were five consecutive weeks of outflows).
In the past five weeks, Bitcoin ETFs have seen a cumulative outflow of 2.6 billion dollars, marking the largest outflow scale in five weeks since the week ending March 28 (when the outflow was 3.3 billion dollars).
Recent price trends have also brought the $100,000 mark back into focus. As of the time of writing, Bitcoin is still trading below this level. Some technical analysts suggest that the market's failure to reclaim this key level could trigger more profit-taking activities.
What makes matters worse is that the overall macroeconomic environment is not favorable for risk assets. Joel Kruger, market strategist at LMAX Group, which operates foreign exchange and cryptocurrency exchanges, pointed out that this has led to the liquidation of some long positions. “We believe that as the market enters the fourth quarter, expectations are overly high, stemming from seasonal trend analysis – historically, this period has performed exceptionally well,” Kruger wrote in a letter to Market Watch.
Krugman pointed out that as investors lower their expectations for a Federal Reserve interest rate cut in December, and weak labor market data raises economic concerns, overall risk assets including Bitcoin are facing pressure again.
Saylor is still accumulating.
Despite this, one of the largest known Bitcoin “Whales” continues to buy in.
Michael Saylor, the chairman of software company Strategy Inc. (now widely regarded as a leveraged Bitcoin investment target), stated last Friday on CNBC that the company has been “accelerating” its purchases of Bitcoin and will announce its buying situation on Monday morning.
As of last Friday, Strategy held over 640,000 Bitcoins, accounting for more than 3% of the current circulating total of 19.9 million of the cryptocurrency. Strategy did not immediately respond to emails seeking comment.
