Whales may have stopped buying Bitcoin after its price reached resistance at USD 50,500, waiting for a correction to buy cheaply. After acquiring approximately USD 10 billion, the presence of whales on the market declined to February levels.
The increasing purchase of cryptocurrencies by the whales that woke up at the end of June may have driven Bitcoin back to USD 50,500. That is evident in the substantial rise in the price and the order books of exchanges at the moment.
Data from blockchain analysis company Chainalysis suggests that Bitcoin purchases may have stopped after its price reached USD 50,500. The accounts that have more than USD 50 million worth of cryptocurrencies have continued to grow. In addition to that, they keep buying, further increasing their capital.
However, Philip Gradwell, chief economist at Chainalysis, notes that Bitcoin whales have stopped buying by the end of August. That happened when the price of Bitcoin hit resistance at USD 50,500. They may be waiting for a correction to buy the cryptocurrency cheaply.
The Effect of the Activity of the Whales on the Prices of Bitcoin
In 2021, the effect of the whales on the prices of Bitcoin has become increasingly apparent. In that regard, reports from Chainalysis show that they had started increasing BTC purchases by the end of June. Those buyers were investors who had more than USD 50 million in their wallets.
Charts indicate that the value of the cryptocurrency started to recover after hitting a low of USD 28,805 in June. However, Philip Gradwell said that that force has slowed by the end of August.
The executive added that this momentum is similar to the one that occurred at the beginning of the year and that it stopped only one month later. Taking those factors into account, he concluded that prices go up for at least twenty-eight days when Bitcoin whales start buying. After that, prices start to fall as they must make a profit, a moment at which sales begin.
In this cycle, this is easy to interpret, only the cleverest investors benefit from those moves. According to the firm, the whales recently made their last purchases, acquiring about USD 10 billion. Since August 22nd, the presence of the whales on the market has decreased to the levels it had in February.
Bitcoin Whales Contribute to the Recovery of Market Capitalization
Bitcoin whales have returned value to the cryptocurrency market in general, allowing it to reach a capitalization close to that in April. In July, the capitalization dropped sharply from USD 2.2 trillion to USD 1.1 trillion.
However, the cryptocurrency market again had a global market capitalization close to USD 2.2 trillion since August 19th.
Bitcoin is trading at around USD 48,685 and has accumulated gains of 1% in the last 24 hours. Its market capitalization is more than USD 915 billion; almost double that of the cryptocurrency market as a whole, according to CoinGecko.
By Alexander Salazar