Whales continue to accumulate Bitcoin (BTC), although the price more than doubled in 2021, according to the latest data from CryptoQuant.
This trend suggests that confidence in Bitcoin is increasing as the price is now trying to stabilize above the $ 50,000 level.
Why Whale Trust Matters
During bull cycles, whales can take profits from their positions, especially when the futures market is extremely crowded.
Whales selling their stocks to balance their portfolios can cause massive price swings in the market, especially when accompanied by cascading liquidations.
In this bull cycle, on-chain data shows that whales are buying rather than selling Bitcoin, likely in anticipation of another uptrend in the future.
Ki Young Ju, CEO at CryptoQuant said:
“Whales are accumulating $ BTC. They have been doing a lot of bear traps lately, but the price seems to be getting back to the institutional buy level of 48,000. Given the recent Coinbase outflows, most of the outflows that went into wallets were at a price of 48,000.”
Whales or high net worth investors might accumulate Bitcoin instead of taking profits from their positions because they might believe that a super cycle could emerge.
Bitcoin didn’t have that much institutional interest before the current bull cycle, especially from public corporations and financial institutions.
Bitcoin is becoming more and more compelling in an environment where the continued expansion of the money supply by central banks is forcing some companies to look for alternatives to cash.
In addition, William Clemente, a pseudonymous analyst, points out that the accumulation addresses are increasing, indicating another “accumulation wave”.
Apparently we are in the middle of another wave of new #bitcoin accumulation addresses pic.twitter.com/7TQ1NE08lH
– William Clemente III (@WClementeIII) March 3, 2021
Macro factors are geared for a Bitcoin rally
As Fundstrat’s Leeor Shimron explains, Bitcoin still has a lot of leeway when valued by the M1 money supply.
Shimron said the Bitcoin cycle could “get very wild,” suggesting that BTC is far from hitting a potential spike.
“The price of Bitcoin in the M1 money stock is still very far from its ATH. Given the unprecedented money pressures, the bull market may just be beginning. This cycle could get very wild.”
There are several other metrics that suggest a bitcoin top is likely to be far from being achieved in the near future.
For example, the SOPR indicator, which measures the profit taking activity of investors, shows that many investors have already taken profits from their positions.
In the foreseeable future, this could ease significant selling pressure on Bitcoin, which coincides with whales continuing to buy up the circulating supply of Bitcoin.
Raoul Pal, the CEO of Real Vision Group, shared a similar opinion. He said that bitcoin would soak up most of the world’s capital over time. He said:
“But it really suggests that investment in technology, and especially Bitcoin (and ALL digital assets in my opinion) will continue to soak up all of the world’s capital over time as people realize this is the most efficient way to get over and about generating wealth. ” over their store of value. “