“Giant whales” are a type of investor or trader who hold a large amount of Bitcoin, and have recently stopped depositing funds in cryptocurrency exchanges.
The data extracted by the blockchain analysis company CryptoQuant shows that since September 16, the funds flowing into the world’s major trading platforms have begun to drop significantly. This trend indicates that the so-called HODLING sentiment is soaring, which means that wealthy traders are more inclined to hold Bitcoins than to trade them for other assets.
“Fortunately, the rate of influx of giant whales seems to be decreasing,” CryptoQuant CEO Ki-Young Ju tweeted. “It seems that the price of Bitcoin has been changing with the traditional market recently. I think the only thing we can do at this moment is to observe the movement of the giant whale, but most of the basic on-chain indicators are healthy.”
Bitcoin’s road to recovery
Observers believe that “giant whales” play an important role in determining Bitcoin’s market trends. The risk of this type of cryptocurrency has dropped sharply due to the attention that a large amount of money is flowing into the exchange. On the other hand, the reduction in deposits eliminated the psychological selling pressure of Bitcoin.
Ju predicted the correlation before Bitcoin fell below $10,300 this Wednesday. On September 21st, he envisioned a short-term price correction for the cryptocurrency based on the surge in “giant whale” activity. Then Bitcoin did usher in a market correction, falling more than 7.81% from the previous high of nearly $10,990.
Other Bitcoin trends in recent history also show market trends dominated by “giant whales”. For example, on March 8, CryptoQuant linked the 50% drop in Bitcoin prices to 6000 BTC inflows across multiple exchanges.
But today is different. With the BTC/USD trading price approaching $10,300, the Bitcoin giant whale is showing signs of accumulation. The chart released by the on-chain data tracking WhaleMap pointed out that clusters are forming nearby. It means that unused bitcoins are increasing.
The analyst explained: “The bubble shows where the unused bitcoins accumulate. The bigger the bubble, the more bitcoins are used here, and the unused means that these bitcoins have not been transferred since they were “flowed into” the whale wallet. ”
Macro market risk
As long as Bitcoin is traded under the influence of macroeconomic fundamentals, short-term sentiment (even bullish sentiment) can change without interruption. As Ju pointed out, the cryptocurrency closely follows the daily trends of the traditional market, which may exacerbate the “giant whale” bearish bias.
One of the main reasons for the potential Bitcoin decline is the strengthening of the U.S. dollar. As the US Congress failed to finalize the second rescue bill against the coronavirus, traders and investors have recently increased their bids for the US dollar. This puts risky assets including US stocks and gold under bearish pressure.
Economists believe that the US government’s financial assistance will not be in place until after the November presidential election, which is expected to provide more room for the dollar to rebound, while further improving Bitcoin’s short-term bearish bias.
