Bitcoin whale clusters show that “institutional FOMO” is behind the BTC rally


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Data shows that institutions have heavily accumulated Bitcoin in the $ 12,000-15,000 range. According to analysts at Whalemap, this is a positive trend as institutes and whales tend to accumulate assets with a longer-term investment strategy in mind.

The fact that bigger hands accumulate BTC instead of retail investors also explains the somewhat suppressed mainstream interest in Bitcoin, as Cointelegraph previously reported. Various metrics, including Google Trends, have shown that despite the parabolic rally, the demand for BTC has declined only marginally in recent months.

The institutional “FOMO” makes the current BTC rally stronger than in previous cycles

Whalemap analysts referred to the recent surge in demand for Bitcoin from whales as “institutional FOMO”.

FOMO, short for “fear of missing out,” refers to a trend where investors are increasingly buying into an asset because they fear it will keep rising. Referring to a chart showing whale piles and inflows into whale wallets, the analysts said:

“These are the levels, and this is what the institutional Fomo looks like.”

Bitcoin whale cluster in the course of 2020. Source: Whalemap

Whale clusters arise when whale addresses – addresses with more than 10,000 BTC – buy Bitcoin and do not move it over a longer period of time.

This shows that whales are planning to keep their recent BTC purchases in their personal wallets. Whalemap analysts said:

“Bubbles indicate prices at which whales bought BTC that they currently hold.”

The aggressive accumulation of Bitcoin by whales is likely due to two major trends seen in the cryptocurrency market since October.

First, there was a sharp decline in liquidations of short-term contracts during the recent rally. Earlier rallies when BTC broke out had liquidated contracts worth over $ 100 million on major exchanges. This shows that the rally was not a short press but an actual accumulation phase.

Second, the spot market led the derivatives market, not the other way around. When the price of BTC rose, BTC’s funding rate was rarely above the 0.01% average.

The low financing rate shows that the futures market was not mostly long, which shows that the demand came from elsewhere.

This bull market will be more stable than 2017

Due to the increased participation of whales and institutions, the overall volume of trade in the recent rally has increased significantly.

Data from Santiment, an on-chain market analyst, also shows a bitcoin volume of around $ 31 billion, which is much higher than it was on Jan. 6, 2018. At that point, the BTC price was also around $ 16,350. Dollar.

Santiment analysts noted that the current rally had more volume behind it than the 2017 rally. The analysts wrote:

“Since Bitcoin reached $ 16,350 at CoinbasePro an hour ago, we are now at the highest price level in 34 months (January 6, 2018). The average Daily trading volume this week is $ 31.0 billion compared to $ 18.5 billion then. “

As Cointelegraph reported, the bitcoin roadblock will remain in place for the near future whether whales will sell with a resistance of $ 17,000. Some analysts say there is no clear resistance up to the $ 18,500-20,000 range, meaning an all-time high could be much closer than most expect.