Bitcoin

Bitcoin’s 30% Recovery in Two Weeks Put BTC Whales Back in Accumulation Mode

Bitcoin's 30% Recovery in Two Weeks Put BTC Whales Back in Accumulation Mode

Bitcoin (BTC) addresses holding at least 1,000 BTC, the so-called whales, started accumulating more tokens during the recent market rally. As of February 10, the total supply at these addresses was 8.096 million BTC compared to 7.95 million on January 24, according to data from Coin Metrics.

Bitcoin Whales and Institutional Flows

Buying sentiment among wealthier crypto investors has picked up momentum on Bitcoin’s rally over the past two weeks, as BTC rebounded from its 2022 low of $33,000 on Jan. 24 to about $43,500 on Feb. 11.

Supply of Bitcoin in addresses above 1,000 BTC. Source: Coin Metrics, Messari

Small Bitcoin investors, addresses that hold less than 1 BTC, the so-called “fish”, have also joined the accumulation frenzy during the recent Bitcoin price rebound.

Meanwhile, data resource Ecoinometrics shows Coin Metrics data as clusters, showing synchronous accumulation behavior among Bitcoin whales and fish.

Interestingly, the clusters looked the same as in the days leading up to BTC’s all-time high of $69,000 in November 2021.

Bitcoin on-chain divergence. Source: Coin Metrics, Ecoinometrics

“Once again this cycle, this price rebound correlates quite well with small fish and whale addresses buying simultaneously for an extended period,” Ecoinometrics analyst Nick wrote in a Remark published on Fed. 7, adding:

“I don’t know if this signal will continue to be predictive of a sustained rally, but hey, so far it’s working well.”

A report published by CoinShares this week also showed an increase in inflows into crypto funds over the past week. Notably, capital injections into these funds quadrupled to $85 billion, including $71 million invested in bitcoin-focused investment products, suggesting that the renewed institutional interest is also driving the rally in the market. BTC price.

Net flows into digital assets as of February 4, 2022. Source: CoinShares, Bloomberg

“Right now, it’s only getting warmer”

Nick suggested that Bitcoin has enough headroom to increase its valuation in the coming months, citing a so-called “aggregate risk score”, derived from four parameters: market risk too wide, risk of a weak demand situation and high supply, risk of holders taking profits, and risk of increased selling pressure.

Related: Bitcoin Rejects Sell As US 7.5% Inflation Fails To Keep BTC Low For Long

The result is depicted in red and blue colors suggesting a hot and cold market respectively. The hotter the market, the higher the selling pressure.

“Right now it’s just getting warmer,” the Ecoinometrics analyst said, adding that “in theory, there’s no impediment to the price rising much further, except for the lack of momentum”.

Bitcoin aggregate risk level. Source: Ecoinometrics

BTC price levels to watch

Meanwhile, the Whalemap on-chain data tracking plan projected $46,200 to $49,000 as Bitcoin’s “current resistance range,” citing higher trading activity in the price zone in the past.

Likewise, the company noted that the $41,400-$42,400 range is now serving as support, as seen in the chart below.

Bitcoin volume profile. Source: Whale Map

“The nearest on-chain resistance according to whale accumulations is only around $47,000, he noted.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.