Perhaps there is an important piece of news about Bitcoin.
Santiment found that whales in recent days have returned to accumulating.
🐳 #Bitcoin's whales have now spent 13 months dumping their cumulative holdings as prices have slid. However, following a big push down in the first 3 weeks of November as #FTX news broke, 47,888 $BTC has been accumulated back in the past 5 days. https://t.co/pQZ6PHY5tW pic.twitter.com/VqTFHOvNY3
— Santiment (@santimentfeed) November 29, 2022
In the graph shared by Santiment, we can clearly see how for more than a year now, public addresses with more than 100 BTC, and less than 10,000, have continued to give up BTC.
The peak occurred in October last year, which was before the last phase of the bull run that led the price of Bitcoin to set new all-time highs on 10 November 2021.
Starting precisely from November 2021, the whales began to divest BTC.
Bitcoin news: the chart shared by Santiment
The graph should be interpreted with care because the yellow line does not represent the number of BTC held in total by the whales’ wallets, but rather the percentage of the Bitcoin supply that appears to be in their hands. It is also drawn in such a way as to highlight the oscillation in an exacerbated way compared to normal.
In fact, the peak in October 2021 was more than 49% of the total Bitcoin supply held on all addresses on which 100 to 10,000 BTC were stored, while the current value has only dropped to 44.29%.
However, the most important thing is not the magnitude of this reduction, but the trend over time.
In fact, the decline that began in November 2021 practically continued until a few days ago, when instead it seems that it may have reversed.
Santiment comments on this by stating that Bitcoin whales spent 13 months offloading BTC as prices fell, but after a strong downward push in the first three weeks of November, in the last five days, they have returned to accumulate. Specifically, they have added 47,888 BTC to their wallets.
Truth be told, five days are not enough to clearly indicate a change in trend, but they could in theory also be the beginning of a similar dynamic.
Bitcoin’s whales: the news could lead to a wave of optimism
It should be remembered that whales, unlike small retail investors, are often not swayed by sentiment or emotion, and buy when prices are low because they believe they can go higher.
Indeed, a dynamic that often occurs is precisely retail panic selling when prices fall, with whales taking advantage of this to buy at low prices and accumulate.
Of course, the opposite also happens, i.e., excesses of enthusiasm that often prompt retail to buy after prices have risen, perhaps from the very whales who had bought earlier when prices were low instead.
This is purely a speculative dynamic, but one that occurs very often in financial markets.
It is possible, though not yet certain, that whales right now are taking advantage of low prices to buy and accumulate, while many retail people are still selling driven by fear of further price declines.
The low peak
With the collapse of FTX in early November, the price of BTC fell even below that threshold, touching $15,500, which is currently the new annual minimum peak.
This is 77% below the all-time high of $69,000 in November last year, which is a lower collapse than in the past.
In both of the previous two post-bubble bear markets, 2014/2015 and 2018, the minimum peak was touched at -85% from the highs, but during the bull run of 2021 Bitcoin’s price growth was far less, in percentage terms, than in 2013 or 2017.
So while one might indeed also expect a further collapse, perhaps below $12,000, there are signs of a possible halt to the decline. On the other hand, the current price is above the 10 November low.
To this should be added that, for example, the low of the previous cycle was touched twelve months after the high, and the high of the last cycle occurred precisely in November last year.
Moreover, the collapse at the end of 2018 actually occurred in a single drop that lasted about 32 days, due to a single event (the hashwar), while the collapse this November due to the FTX bankruptcy lasted only four days and has already stopped.
Yesterday’s news of BlockFi’s bankruptcy also failed to bring the price of BTC down below the lows of 10 November, so it may be that the November 2022 slump has stopped.
However, it remains to be seen whether there will be more such events, perhaps in December, or whether the bad news is finally over.
The largest holders of Bitcoin
Currently, the address range that holds the most Bitcoin overall is still the one between 1,000 and 10,000 BTC, which is the whale range, with more than 4.6 million BTC held overall.
Second is the range between 10 and 100 BTC, which is the range of large holders who cannot be considered whales, with 4.3 million BTC.
In third place is the range between 100 and 1,000 BTC with 3.8 million.
It is worth noting that the 1 to 10 BTC range holds more than 2 million Bitcoin, which is not much less than the 2.2 million held by the 10,000 to 100,000 range. This means that the Bitcoin held by exchanges right now are not that many, since they are comparable to those held by small- to medium-sized savers.