In recent weeks, the Bitcoin market has witnessed noticeable activity by what are known as “Bitcoin whales” - investors who own large amounts of this digital currency. These whales transferred huge amounts of Bitcoin from trading platforms to their own wallets at the fastest rate since 2015. This activity is measured using the “Whale Net Position Change” indicator from Satoshipedia.com, which indicates significant accumulating, consolidating and holding activity at current prices.
Current activity (2023-2024)
It can be seen that there has been a significant increase in the change in the net position of whales in the recent period, as whales have been transferring large amounts of Bitcoin from trading platforms to private wallets. Whales in 2024 added more than 110,000 BTC per week on average, compared to 60,000 BTC per week in 2021. There are 1,656 addresses each holding at least 1,000 BTC as of August 1, 2024.
This behavior indicates the intention of whales to accumulate and hold Bitcoin, reducing the available supply in the market and boosting the price. In periods when the change in net position is positive (i.e. whales are collecting Bitcoin), the price is usually rising. This indicates that whales trust the price to stabilize or rise.
What does transfer to and from platforms mean and what is the effect of transferring Bitcoin from trading platforms to cold wallets?
The chart also shows Bitcoin transfer flows to and from trading platforms. When flows to platforms are large, this may indicate whales' intention to sell, while when flows from platforms are large, this may indicate intention to hold. The effect of whales withdrawing Bitcoin from exchanges to cold wallets on the market can be summarized as follows:
Reduced supply available for trading: When investors withdraw large amounts of Bitcoin from trading platforms, the supply available for sale decreases. This shortage in supply can cause the price to increase if demand increases or remains stable.
Increased confidence in the market: Bitcoin withdrawal from exchanges usually indicates investors' intention to hold it for a long period (hodling). This could be interpreted as an indication of confidence in Bitcoin's future, which could increase demand and push up the price.
Reducing selling pressure: When transferring Bitcoin from trading platforms to private wallets, selling pressure on Bitcoin in the market is reduced, as Bitcoin in private wallets is less likely to sell quickly compared to Bitcoin on platforms.
Psychological impact: News about the withdrawal of large amounts of Bitcoin from trading platforms can psychologically affect investors, as this can be interpreted as a signal of expectations of rising prices in the near future.
Whale behavior is often an indicator of changes in market sentiment. Some analysts see the recent activity of whales as indicating that Bitcoin has bottomed, anticipating a potential increase in price.
However, Bitcoin faced resistance around the $71,000 price. This may be due to factors such as profit taking by short-term investors or fears of overvaluation. Some analysts including Saif Abu Srour expect that a major breakout may not occur until September, reflecting the ongoing market volatility.
Conclusion: Whales moving Bitcoin from trading platforms to private wallets usually indicates their intention to accumulate, consolidate and hold rather than sell. This behavior reduces the supply available in the market, which may push prices higher. The increase in the number of whale addresses also reflects growing confidence in the future value of Bitcoin.
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