Bitcoin (BTC) Whales Accumulate $157 Million, Potential Market Impact Looms

Key Takeaways

• Three Bitcoin (BTC) whales have accumulated $157 million from Binance.
• The Bitcoin price has struggled in August and failed to recover in September.
• Is BTC being accumulated, or is this part of a larger manipulation strategy?

Since March 14, the Bitcoin (BTC) price has traded in a corrective pattern following its all-time high of $73,777. The movement inside the pattern has been choppy, but it is not clear if the decrease is corrective or if it is the beginning of a longer-term downward movement.

BTC whale accumulation going on since the start of September points toward accumulation, but the wave count and price action give mixed signs, making the next move uncertain.

Whales Accumulate BTC

Data from Lookonchain shows that since Sept. 1, three whales have accumulated  roughly 2,814 BTC, which is $157.3 million at the current price. The whales were bought at an average price of $55,887, so they are currently underwater by roughly 2%, or slightly over $3 million.

When using the Inner Circle Trading (ICT) power of three strategy, the BTC price movement resembles a bullish accumulation that will eventually lead to an upward movement.

Bitcoin’s trading range is between $56,400 and $72,300 (yellow). During this period, there have been three failed breakdowns (red), which are considered manipulation.

To complete the pattern, BTC has to move back inside its range and eventually break out, beginning a sharp upward movement.

However, the pattern is not exactly textbook, since the accumulation is not horizontal but has a downward tilt.

This is not a bearish pattern because when there is bearish manipulation that eventually leads to a downward movement, the price often does a failed breakout to the upside. This traps traders who believe this is the beginning of the upward movement.

This is not the case in Bitcoin since all the movements outside the range have been to the downside. It fits with the pattern of BTC whales purchasing, possibly gearing up for the eventual breakout.

Bitcoin Price Creates Double Bottom

The daily BTC price chart shows a double bottom pattern that has been developing since the low of Aug. 5. Besides being bullish, the double bottom is combined with bullish divergences in the Relative Strength Index (RSI) and MACD (green).

The BTC price rallied over 30% the previous time such a divergence transpired. However, it is worth mentioning that the bullish divergences have not been confirmed yet. A continued decline could invalidate them.

Since a decline would also cause a breakdown from the long-term descending parallel channel, it would go a long way in invalidating the possibility of a reversal.

On the other hand, moving above the channel’s midline at $61,000 will likely confirm the reversal. Besides the positive price action, this would likely cause the RSI to increase above 50 and the MACD to move into positive territory, supporting the reversal hypothesis.

What Does the Wave Count Say?

The most likely BTC wave count is still positive, suggesting the price has completed wave four of a five-wave upward movement (white) or is close to doing so. This is because the Aug. 5 low (white icon) happened at a confluence of support levels:

• 0.5 Fibonacci retracement of wave three
• Middle of the channel connecting waves one and two (white)
• Support trend line of a descending parallel channel (black).

It also created a long lower wick, a sign of buying pressure.

However, if wave four has not ended yet, it would be longer than wave three, a somewhat unusual characteristic.

The other issue with the count is that the bounce since Aug. 5 resembles a three-wave structure (white). The ensuing decline looks impulsive, the opposite of what occurs if the count is accurate.

The alternative count would be an extended wave four. The sub-wave count is in black, showing a lengthy W-X-Y corrective structure.

In this possibility, BTC would resume its decline toward the horizontal support at $47,500, validating the long-term channel’s (white) support trend line.

Both possibilities remain valid, and the direction of the next move can determine which count will materialize. In both cases, another upward movement and a new all-time high are likely.

BTC Indecision Looms

Multiple mixed signs indicate uncertainty for Bitcoin’s long-term trend. On the positive side, BTC whales are accumulating and the price has created a double-bottom pattern. On the negative one, the accumulation has taken far too long and BTC risks breaking down from its long-term pattern.

Whether Bitcoin breaks out or moves above the channel’s midline can determine if wave four has ended or if another low awaits.

About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

See more

[email protected]