BTC - Whales were buying while you were sellingsteemCreated with Sketch.

in bitcoin •  last month 

Whales have been buying what retail has been selling

I stumbled upon a very interesting chart the other day.

It shows the percentage of bitcoin's total supply held by wallets with 1,000 or more bitcoin in them, whale accounts.

Well, not technically "1,000 or more", it's technically wallets that hold between 1,000 and 1 million bitcoin, though in my defense there are not many wallets out there with more than 1 million bitcoin in them.

Anyways, the data is showing something very interesting.

Check it out:

(Source: https://www.bloomberg.com/news/articles/2019-12-12/bitcoin-whales-consolidation-may-mean-more-turbulence-ahead)

Some observations....

Looking at the chart above something very interesting stands out to me.

During the height of the last bull run in late 2017, the percentage of bitcoin held by these largest accounts was consistently falling.

Which is exactly what you would expect when you have a flood of retail buyers entering the markets.

However, what is most interesting to me is the fact that the largest wallets holding's very closely move inversely related to the price.

Meaning that has the price went up, their percentage of the total bitcoin holdings went down, and as the price went down in 2018, their percentage of the total holdings went up.

Hmm...

Crazy like a fox?

Looking at this data, it looks very much like whale accounts were selling during the most euphoric phase of the bitcoin rally in late 2017.

They stopped, interestingly enough, right about the time bitcoin peaked around $20k.

Then as the price drifted lower through much of 2018, their holdings swelled again as a percentage of total supply.

Given that information, it looks very much like the largest accounts were dumping while retail was buying and it looks like they have been accumulating for much of the past 2 years while others have been unloading.

Perhaps they are gearing up for the next euphoric phase where they can sell to the new comers at inflated prices.

Rinse and repeat.

Stay informed my friends.

-Doc

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It always amazes me how the media only ever celebrates a seller's market and not a buyer's market, either in financial investments or real estate. (On the later, shouldn't it be a good thing if houses are a little easier for first-timers or young families to buy?)

Prices go down, and we're all expected to jump off the nearest window ledge, rather than stock up on bargains.

  ·  last month (edited)

I think housing is a bit different as the majority of people in houses are using them to live in. And when people get upside down on their mortgage (owing more than the house is worth), it can cause serious problems, especially if they need to move and/or it's coupled with a poor jobs environment.

I watch a youtuber that invests in Magic and he's noticed on good products, a lot of the people that will be online bad-mouthing the product, will also be the ones that are buying large amounts of his product.

I wouldn't be suprised that some of the ones that are the most vocal ones against bitcoin are some of the whales quietly accumulating at the bottom.

Could be. I would say watch for ones that change their tune.... IE get bearish and then flip to bullish or vice versa.

Im just waiting to see how long it takes until we get a new gang of those that will get rekt when that line goes the other direction again.
Hope its not a generational thing and it takes 10+ years. lol

Well, these booms and busts seem to be related to the block reward halvings, and if that is the case, we should be starting the next boom cycle very shortly... with prices likely peaking end of 2021.

These Whales have built their wealth with Bitcoin. Surely, they must be smart enough to know what's going on, and what's going to happen. If they're starting to slowly accumulate, then they must be expecting a large, perhaps steady price growth soon.

Keep calm, and hodl' on :-)

That's what I am thinking. They brought bitcoin this far already, I am betting they have at least one more large push in it again.