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Bitcoin whales could prevent BTC price from “capitalizing”

Bitcoin whales could prevent BTC price from "capitalizing"

Bitcoin (BTC) may still have a large price capitalization, but the data suggests that more whales need to start selling first.

In one of its daily QuickTake market updates on May 27, the chain analytics platform CryptoQuant highlighted the bearish behavior of whales.

“Total capitulation” should lead to the sale of small whales

Amid widespread consensus that the BTC / USD pair should trade below their May 12 pivot price of $ 23,800, some of the largest bitcoin holders are showing signs of impatience.

Looking at the unspent transaction (UTXO) outputs from “various whale wallet bands,” CryptoQuant contributor Binh Dang noted that sales of this top band have been increasing since April.

The distribution of BTC to entities with a million dollars or more, known as “giant” whales, has increased, while smaller whales – those with less than a million dollars – are changing more slowly.

“After the low in late January, we still saw the accumulation as all major value bands rose, but from April 21 to date, the whales (range more than $ 1M – USD) have moved on to distribution and are not currently receiving any signals. accumulate, ”explained Dang.

“If the whales and the individuals pull out, I think we will see a full surrender and the bottom as well. Otherwise, I will keep an eye out for positive movements in the $ 1 million range to reflect on reversal ”.

The accompanying chart showed the offer made by whales falling sharply, with whales starting to sue for only $ 100,000 to $ 1 million.

In contrast, those with $ 10,000 to $ 100,000 and $ 1,000 to $ 10,000 showed no sign of surrender.

“Whales continue to move into distribution. Small and retail remain on the defensive, ”added Julio Moreno, senior chain analyst at CryptoQuant, in private comments sent to Cointelegraph.

Data from Glassnode, another chain analysis company, confirmed an overall decline in the number of entities that qualify as whales.

Once again, the distribution of whales showed an acceleration since April, and since May 27, the overall number of whales has been at its lowest level since July 2020.

Graph for bitcoin entities with a balance of more than 1,000 BTC against the price of the BTC / USD pair. Source: Glassnode

Eyes on volume trigger

Earlier in May, whale buying levels raised key support targets below $ 27,000.

Read Also: Bitcoin Settles for Prepayment After Subtracting Price from Lowest Level from Terra Crash

For Whalemap blockchain monitoring capability, these levels were attractive after the initial decline on May 12th.

In a subsequent analysis, the researchers showed that capitation events of the type predicted for the BTC / USD pair required BTC to translate both profit and loss into high proportions.

“On May 12, profits AND losses were higher than usual,” said some of a explanatory tweetalongside a moving chart of profit / loss data (MPL).

“A good example of capitalization took place in December 2018, when similar (but on a much larger scale) MPL activity was present.

This week, the number of transactions on the blockchain has increased significantly as reported by Cointelegraph.

Annotated chart of profit and loss movement (MPL) of bitcoin against the price of the BTC / USD pair. Source: Whalemap / Twitter

The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every investment and every trading operation involves risk, you should do your own research before making a decision.

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