Whales Hoarding Bitcoin: Big Wallets Hit 17-Month High
Bitcoin whales are on the move, buying more Bitcoin as smaller traders sell their holdings. A recent report shows that the number of Bitcoin wallets holding 100 or more BTC has reached a 17-month high. This is happening while retail traders are feeling the pressure from falling prices and selling off their Bitcoin. Let’s take a closer look at what’s going on.
Bitcoin Whales Are Buying Big
In the last month, the number of Bitcoin wallets with at least 100 BTC has surged. According to Blockchain analytics platform Santiment, 283 new wallets crossed the 100 Bitcoin mark in August. This brings the total number of these large wallets to 16,120, which is the highest number we’ve seen in the last 17 months.
Bitcoin whales, who are individuals or entities holding large amounts of Bitcoin, seem to be taking advantage of the current market conditions. As prices have dropped, these whales have been busy buying more Bitcoin. In fact, they’ve added over 133,000 BTC to their wallets in the past 30 days, which is worth more than $7.6 billion.
Why Are Smaller Traders Selling?
While whales are buying, smaller traders are selling. Adam Back, the CEO of Blockstream, noticed that since Bitcoin’s price fell from over $62,000 to around $58,000 at the end of August, whales have been on a buying spree. According to Back, these whales are buying about 450 BTC every minute.
Santiment suggests that smaller traders, sometimes called “sharks” when they hold at least 10 BTC, are feeling the pressure as prices drop. Many of them bought Bitcoin at higher prices, and now that the price is below their entry point, they’re selling to cut their losses. Crypto analyst Axel Adler Jr mentioned in a post on X (formerly known as Twitter) that if the current trend continues, we might see even more people selling their Bitcoin at a loss.
The Role of Market Sentiment
The Crypto Fear and Greed Index, which measures the sentiment of the crypto market, shows that many traders are feeling scared right now. In August, the index spent more days in the “Fear” zone than in the “Greed” zone, with an average rating of 37. This fear is likely driving some of the selling, as traders worry about further price drops.
Despite this, some experts believe that the increase in whale activity could be a good sign for the market. Vivek Sen, the founder of Bitgrow Lab, suggests that the fact that whales are buying might mean they see value in Bitcoin at these lower prices. This could be a positive sign for the market in the long run.
Bitcoin’s Performance in August
August was a tough month for Bitcoin. The price of BTC fell by 8.6%, ending the month at a fresh two-week low. This drop was worse than the average monthly performance, as Bitcoin typically gains about 1.75% in August. The data from CoinGlass also shows that September has historically been a challenging month for Bitcoin, with an average loss of 4.5%.
As September begins, traders are wondering if the so-called “September Effect” will impact Bitcoin this year. The September Effect is a term used in the stock market to describe the tendency for stocks to perform poorly in September. Bitcoin has shown a similar pattern, with September often being one of the worst months for BTC.
Will the September Effect Strike Again?
Since 2013, Bitcoin has only had three positive Septembers, with gains in 2015, 2016, and 2021. In most other years, the cryptocurrency has seen significant losses during this month. The worst September for Bitcoin was in 2014, when the price dropped by more than 19%.
Given this history, some traders are worried that Bitcoin might face another tough month. On-chain analyst Ali Martinez has pointed out that Bitcoin needs to break above $66,000 soon to avoid entering a prolonged bear market. If the price stays below this level, we could see further declines.
What Would Investors Do (Not investment advice)?
With so much uncertainty in the market, what should investors do? It’s important for investors to stay informed and follow their strategies carefully. The increase in whale activity suggests that some big players believe Bitcoin is undervalued at current prices. However, the historical data for September indicates that we could see more volatility in the coming weeks.
For those who are holding Bitcoin, it might be a good idea to keep an eye on the key price levels mentioned by analysts, such as the $66,000 mark. If Bitcoin can break above this level, it could signal a recovery. On the other hand, if the price continues to drop, we might see more selling from smaller traders, which could push the price even lower.
Bitcoin whales are hoarding more BTC as smaller traders sell off their holdings. This has led to a significant increase in the number of large Bitcoin wallets, reaching a 17-month high. While the market sentiment is currently fearful, and September has historically been a tough month for Bitcoin, the actions of whales suggest that they see value in the current market. Investors should remain cautious, stay informed, and be prepared for potential volatility in the coming weeks.
Disclaimer: None of this is investment advice in any shape or form.
