Bitcoin Whales Show Confidence in Latest Rally as They Refuse to Sell, On-Chain Data Reveals
Despite the rally in Bitcoin that has seen prices jump around 27% since the start of the year, on-chain data suggests that Bitcoin whales are not using the pump as an opportunity to sell their holdings. According to some analysts this is a sign of confidence that the recent rally signal the start of a longer-lasting bull market.
According to data from crypto analytics firm Glassnode, the number of Bitcoin addresses holding between 1,000 to 10,000 Bitcoins (or so-called whale addresses) has remained broadly steady at just above 1,900 since the start of December. Shark bitcoin addresses, which hold anything between 100 to 1,000 Bitcoins, have also held steady in number in recent weeks. According to Glassnode, there was last around 14,000 of them.
The Fish and Crabs Have Been Accumulating
Bitcoin bulls will be pleased to know that two important address cohorts have continued to accumulate the world’s largest cryptocurrency by market capitalization in recent weeks and at an accelerated pace since the collapse of FTX in early November. According to Glassnode, the number of Crab Bitcoin address (which hold 1-10 Bitcoins) had risen from under 760,000 prior to the FTX collapse to close to 830,000 as of last week.
Over the same time period, the number of Fish addresses (which hold 10-100 Bitcoins) has jumped from around 135,000 to close to 140,000, near its record high.
This suggests that medium to large sized Bitcoin investors 1) used the drop in price triggered by the collapse of FTX as a dip buying opportunity and 2) are not selling their holdings as prices recover back to their pre-FTX implosion level.
Small Investors Yet to Pile In
Large and mega sized Bitcoin investors are clearly shown solid signs of 1) wanting to buy the dip and 2) not wanting to sell into the rally in recent weeks and months. But the Bitcoin bulls shouldn’t get too excited just yet.
That’s because we are yet to see an acceleration in the growth of new Shrimp addresses (holding under 1 Bitcoin) that typically occurs during bull markets. Indeed, according to Glassnode data, the number of Shrimp addresses has flatlined around 42 million in the last few weeks, after enjoying a short-lived bump to nearly 43 million in the immediate aftermath of the FTX collapse.
If this number starts to rapidly rise, as happened period of rapid Bitcoin price gain, such as during 2019 and late 2020 to early 2021, that would signal that smaller retail investors are once again getting involved, which would be a bullish sign.