Surge in Bitcoin Whale Activity
Recent on-chain data from Santiment reveals that wallets holding 10 or more Bitcoins have reached levels last seen two years ago. This resurgence in whale activity is occurring as Bitcoin's price hovers around $66,000. At the time of writing, Bitcoin (BTC) is trading at $66,184, with a market cap of $1.304 trillion.
Whale Holdings Reach Two-Year Highs
According to Santiment, Bitcoin whale wallets containing 10 or more Bitcoins have matched their holdings from 2021. During this period, Bitcoin's market cap surged by 226%. There is speculation within the crypto community that the now-bankrupt exchange FTX may have suppressed crypto prices in the latter half of 2022. Since FTX's collapse in November 2022, there has been a notable correlation between the holdings of these larger Bitcoin wallets and BTC price movements. Despite the increase in whale activity, Bitcoin's price remains under pressure and has struggled to surpass $70,000.
BTC Price Dependent on Fed Rate Cuts
Despite Bitcoin flirting with its all-time high levels, most altcoins remain below their peaks, leading to caution among market participants. Renowned crypto analyst Benjamin Cowen suggests that the anticipated altcoin bull run may be premature. Cowen asserts that a significant rally in the crypto market is unlikely until the Federal Reserve resumes cutting interest rates. Historically, the altcoin market has performed better following such rate reductions.
Cowen noted, “The decline in the majority of altcoins is mirrored in the falling advance/decline index, echoing the period leading up to the Fed’s rate cut in 2019. This index saw a sharp decline before the Fed initiated rate cuts in July of that year. It’s essential to track these movements because the anticipation of an altcoin season dominating Bitcoin may be premature without a reduction in interest rates by the Fed.”
Cowen also advises investors to be cautious about purchasing altcoins during periods of high Bitcoin dominance.
Conclusion
The resurgence in Bitcoin whale activity, combined with historical data, suggests potential for a price rally. However, analysts like Benjamin Cowen emphasize the importance of Federal Reserve interest rate cuts for a significant market upturn. Until such financial conditions change, both Bitcoin and the broader crypto market may continue to experience volatility and cautious trading.
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