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Bitcoin Whales Preparing to Cash Out or Bracing for Turbulence? 

Published March 5, 2024 1:52 PM
Shraddha Sharma
Published March 5, 2024 1:52 PM
By Shraddha Sharma
Verified by Peter Henn

Key Takeaways

  • Bitcoin whales and ETFs are influencing the cryptocurrency market, potentially signaling a new bull run.
  • Record volumes and massive inflows into Bitcoin ETFs show growing institutional interest in BTC.
  • Bitcoin holders remain at record levels amid the Bitcoin price rally.

A Bitcoin whale pattern has emerged for the current cycle that replicates activity from the past bull runs. Analysts note a twist in this cycle as Bitcoin Exchange-Traded Funds (ETFs) are now leading the charge.

Whale accumulation, coupled with significant ETF trading volumes and retail investor activity, raises a question. Are we on the cusp of a Bitcoin bull run, or is there just going to be consolidation?

The Role of Bitcoin Whales and ETFs

Bitcoin whales, large BTC holders, have historically played an important role in bull cycles. However, currently, it’s the Bitcoin ETFs that are akin to Bitcoin whales, drawing attention to price. Analysis by Ecoinometrics notes that BTC has experienced a price surge on the back of whale purchases.

On March 4, Bitcoin ETF volumes hit $5.5 billion in trading volume on a single day. It was the second-highest trading volume since the ETFs’ January debut, coinciding with Bitcoin hitting a peak. In one week, US inflows have surpassed $1.8 billion with a majority contribution from Bitcoin ETFs, according to CoinShares data.

Retail investors are also a major force in the Bitcoin Whale accumulation phase. Ecoinometrics  explains that all major ETF funds are siphoning coins from smaller investors and concentrating them among larger players or whales. The shift suggests a growing whale force behind Bitcoin, with ETFs like BlackRock and Grayscale leading the pack in terms of investment volumes.

What is the Market Sentiment?

WhaleWire suggests major retail investors dived into the purchase cycle between $60,000 and $62,000. Many of them entered the market at peak prices, embodying the “Sell Low, Buy High” approach that often leads to losses due to ‘fear of missing out.’

But the current price rally is ensuring all holders are at a profit. Meanwhile, crypto commentator Zerohedge  identifies one whale who has been on an accumulation spree over the past 15 months. The whale has repeatedly accumulated over $3 billion in Bitcoin.

IntoTheBlock analysis of Bitcoin ownership by duration reveals three main types of investors: Hodlers, Cruisers, and Traders. Hodlers, who have held Bitcoin for over a year, are at the highest levels. This distinction is important as Hodlers hike their holdings at the start of a bull run and the reverse becomes true at the end of it.

Bitcoin Hodlers at Highest Levels | Source: IntoTheBlock
Bitcoin Hodlers by Time Held at Highest Level | Source: IntoTheBlock

Accumulation Suggests New Cycle

 The current Bitcoin price and accumulation is largely influenced by the Bitcoin ETFs. Bitcoin whales appears to be showing their confidence in Bitcoin’s future, with retail investors entering the market during this peak period.

The accumulation patterns should lead to a sustained bull market despite small periods of profit-taking.

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