Interest in Bitcoin has not decreased but rather continues to grow despite the market crash. Whales thank Elon Musk as his comments allow them to accumulate more Bitcoin.
Bitcoin (BTC) experienced a week of intense decline, which took it to a low of USD 30,200, but now shows a slight recovery. Although its value remains 41% below its all-time high, analysts see optimistic elements in the on-chain data. Renowned expert Willy Woo believes that the bullish market is still intact.
Woo said that the increasing number of entities on the network is a relevant indicator of where Bitcoin’s price is heading. He perceives this metric as a sign that the value of the cryptocurrency will recover given that more people are actively buying.
The analyst noted in a Glassnode chart that the number of users grows regardless of whether Bitcoin’s price goes up or down. The data provider uses a Bitcoin entity net growth indicator. Several attributes allow it to determine whether a single address is linked to an entity or whether multiple addresses are related to a single entity.
“The number of Bitcoin users has doubled approximately every year since its inception twelve years ago. Therefore, the 2021 peak may end at much higher levels than the 2017 peak. Taking this trend into account, we are just warming up,” according to Willy Woo.
Nobody Knows Where the Panic that Spread on the Bitcoin Network Is Going
More entities have bought more Bitcoin but the recent market crash has also caused thousands of addresses to be left empty. Analyst Lex Moskovski pays special attention to a group of addresses that had bought Bitcoin for the first time. They dumped their funds immediately after its price began to decline.
These “weak hands,” along with news that China launched tighter controls on Bitcoin, contributed to the price of the pioneering cryptocurrency collapsing. However, long-time holders continued to accumulate Bitcoin in the same address, regardless of the amount that they own.
According to analyst Dilution-proof, when panic seized weak hands, older “strong hands” acquired the funds that these “young” addresses dumped. The former refuse to “exchange their digital gold for cash or another asset (such as gold or real estate),” he added.
Whales Thank Elon Musk for His Negative Comments on Bitcoin
“Many Bitcoin whales have been born during the crash. Entities with a lot of money seem to have bought during this event,” Dilution-proof noted in a tweet with the hashtag “#Thank you Elon”.
The analyst shared a chart indicating that whales with 10,000 BTC on their balance sheet bought during the crash. Bitcoin evangelist Anthony Pompliano also provided data to support this analysis. He said that whales bought 122,588 BTC, equivalent to around USD 3.7 billion when the price dropped to USD 30,000.
The addresses with the most Bitcoin recently received another 39.6 BTC, equivalent to USD 347,000, according to Dilution-proof. However, it will still be necessary to determine whether the decline in hash rate will affect Bitcoin’s price, which has dropped by around 20%.
By Alexander Salazar
