The data shows that institutions have accumulated a large amount of Bitcoin between 12,000 and 15,000 US dollars, and according to Whalemap analysts, this is a positive trend because institutions and whales usually consider long-term investment strategies to accumulate assets.
As previously reported by Cointelegraph, the fact that large sums of money are accumulating BTC rather than retail investors also explains the decline in the mainstream market’s interest in Bitcoin. Despite the parabolic rebound in recent months, various indicators including Google Trends have shown that mainstream demand for BTC is sluggish.
The agency “FOMO” makes the current BTC rebound stronger than the previous cycle
Whalemap analysts described the surge in whale demand for Bitcoin as “institutional FOMO”
FOMO is short for “fear of missing out” and refers to a trend in which investors are increasingly worried that this asset will continue to grow and purchase the asset. Analysts said, referring to the chart showing whale clusters and inflows into whale wallets:
“These are all levels. This is what the organization looks like.”
When whale addresses (addresses holding more than 10,000 BTC) buy bitcoins and do not move for a long time, swarms of whales will appear.
This indicates that Whale plans to keep its most recent BTC purchases in its personal wallet. Whalemap analyst stated:
“The bubble indicates that the whale bought the price of the BTC currently held.”
Since October, two key trends have emerged in the cryptocurrency market, with whales spreading bitcoin in large numbers.
First, in the recent rebound, there has been a sharp decrease in the liquidation of short contracts. In previous rallies, when BTC broke out, contracts worth more than $100 million were liquidated on major exchanges. This shows that the rally is not a short-term squeeze, but an actual accumulation phase.
Second, the spot market has always been ahead of the derivatives market, and vice versa. When the price of BTC rises, the financing rate of BTC rarely exceeds the average 0.01%.
The lower financing rate indicates that the futures market is not in the majority, which indicates that demand comes from elsewhere.
This bull market will be more stable than 2017
In addition to the participation of whales and institutions, the overall transaction volume has increased significantly during the recent rebound.
Data from the on-chain market analysis company Santiment also shows that Bitcoin transaction volume is approximately $31 billion, which is much higher than the level on January 6, 2018. At that time, the price of BTC was also hovering around US$16,350.
Santiment analysts found that the current gains lag behind the 2017 gains. The analyst wrote:
“As Bitcoin reached $16,350 on CoinbasePro an hour ago, we are now at the highest price level in 34 months (January 6, 2018). The average daily transaction volume this week was $31.0B, and then $18.5B.”
As reported by Cointelegraph, Bitcoin’s immediate obstacle remains whether the whale will sell at the resistance level of $17,000. Some analysts said that until the $18,500 to $20,000 range, there is no obvious resistance, which means that the historical high may be much closer than most people expected.