The price of Bitcoin got off to a strong start to the new year, surpassing $90,000 on Friday, January 2nd. This newfound momentum could have been triggered by a number of factors, but on-chain experts pointed out that whale activity was not one of them.
A Closer Look: BTC Whale Holdings Are Actually Declining
In a recent post on social media platform This conclusion is based on the Total Whale Holdings and Monthly % Change and Total Dolphin Holdings and Monthly % Change charts.
As the name suggests, the Total Whale Holdings and Monthly % Change chart shows the total balances of addresses with more than 1,000 coins and their changes over the past month. Meanwhile, the Total Dolphin Holdings and Monthly % Change chart shows the change in investor balances between 100 and 1,000 BTC (capturing exchange-traded fund holdings).
What’s more unusual is that exchange wallet addresses are excluded from total whale (and dolphin) holdings and monthly fluctuation rates. According to Moreno, much of the Bitcoin whale data has been distorted by exchanges consolidating many holdings into fewer addresses with larger balances, which explains why whales appear to be in a re-accumulation phase recently.
Interestingly, removing data from all exchange addresses actually skews the data, as overall Bitcoin whale balances appear to be decreasing rather than rising. The same trend can be seen in the bottom Total Dolphin Holdings and Monthly % Change chart in the image below.
Source: @jjc_moreno on X
The decline in balances of these Bitcoin whales tells the story of declining demand in the market and signals the beginning of a bear market. As seen in past cycles, the lack of a clear increase in demand is the most noticeable sign that a correction phase in the Bitcoin price is imminent.
As of this writing, the BTC price is around $90,320, up more than 2% in the last 24 hours.
Bitcoin ETF spot suffers historic losses
The US Bitcoin ETF market has been an excellent way to gauge investor demand in the cryptocurrency market since its trading debut. However, market data has not told a good story for the flagship cryptocurrency in recent weeks.
In context, tBlackRock’s, the largest Bitcoin ETF will gorecorded net outflows of approximately $244 million last week, marking the second consecutive week of withdrawals. The fund has now seen net withdrawals in eight of the last 10 weeks, with just 20 total weekly outflows since its launch two years ago.
According to the latest data, cryptocurrency funds recorded net outflows of about $446 million last week, marking the sixth week of withdrawals in the last nine weeks.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from Unsplash, chart from TradingView
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