Bitcoin “whale” rolls in, retail investors may be at a disadvantage


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After fluctuating between $17,000 and $18,000 for 5 days, Bitcoin regained its position at $19,000 on December 13. On OKEx, on that day, the highest 24-hour price of BTC reached $19,381, which happened to be the same as the high point when it first broke the $19,000 mark this year on November 24.

The currency circle looks forward to seeing $20,000 worth of BTC this year, but this historical record has never been broken. The long and short sides formed a tug-of-war in November. On November 27, BTC fell to $16,490.

But the upward curve in the fourth quarter is still regarded by optimists as a precursor to a bull market. The positive signals that continue to be released include the news that traditional companies and financial institutions have successively held high-profile positions. They are becoming the “whales” of Bitcoin, and Grayscale Trust is even regarded by retail investors as a weather vane for following operations.

On the day before BTC returned to the $19,000 mark, a new report issued by the crypto asset exchange OKEx and data service provider Kaiko pointed out that retail investors have been chasing BTC higher when the price of Bitcoin has risen in the past few months. A seller in panic. In contrast, “whale” traders or institutional investors have made a profit and mainly buy on dips.

In other words, retail investors are chasing ups and downs.

However, some analysts believe that the buying and selling behaviors of “giant whale” institutions like Grayscale and MicroStrategy do not occur in the exchange environment, so they have little impact on market prices. Small institutions and whales are more likely to use exchanges.”

The target of retail investors to follow or be wary of may not be the “giant whale” with hundreds of millions of dollars in funds. Wan Hui, the founding partner of Primitive Ventures, pointed out more directly that the future price of BTC is “determined by those who have money on hand and other rich people they can influence, not by the internal volume of the stock market.”

Retail investors chase high “whales” after making profits

At 4 o’clock in the afternoon on December 13th, Beijing time, BTC regained its position at $19,000. This time, the people in your circle of friends who previously posted the “$20,000” celebration poster seemed to be more cautious.

After all, after entering November, BTC jumped up and down too many times at the US$19,000 mark. On November 27, it once fell to US$16,490. It was the Thanksgiving holiday in Western countries, and BTC also entered. “Promotional discount season” is average.

Since Grayscale Trust continued to increase its holdings of BTC, people have pinned their hopes for the bull market on the “giant whales” of such institutions as Grayscale. Not long ago, MicroStrategy, a business consulting service company listed on the New York Stock Exchange, also announced that it plans to issue convertible bonds to raise funds to purchase BTC. The fundraising scale was later increased from US$400 million to US$650 million.

The actions of the “Giant Whale” are regarded by some retail investors as an operational weather vane. However, new data reports show that some “whale” institutions are implementing different operating strategies from retail investors.

On December 12, a data report released by the crypto asset exchange OKEx and data service provider Kaiko pointed out that retail investors have been chasing BTC higher when the price of Bitcoin has risen in the past few months. In contrast, “whale” traders or institutional investors took profits and continued to buy on dips.

The report selected the most commonly used trading pair on the exchange-BTC/USDT data, and tracked it from August 1 to November 30 this year, and analyzed that the two parties classified different BTC order volume ranges for the transaction. Although the report believes that orders holding 10 or more BTC come from large traders, giant whales, and institutions, it also acknowledges that it is actually difficult to distinguish between them, “because there is no strict threshold for such traders.”

However, the data shows that in the four months when Bitcoin almost doubled, especially during the period when BTC continued to rise from October to November, small transactions generally regarded as “retail investors” continued to execute buy orders. In large-scale transactions in the trading range of 5 to 10 BTC and above, net selling is the more common behavior.

“During the currency price surge, most retail investors continue to increase their positions. The result of this may be that retail investors will fall into a short- or medium-term dilemma.” The report said, on the other hand, when the BTC price is at $10,000, large-scale transactions He Institution has accumulated the most significant amount of currency and “decided to make profits during this rebound.”

Thanksgiving crash day Xiaosan most panic

In addition to tracking net purchases and net sales in different trading ranges within 4 months, OKEx and Kaiko’s reports also provide data on trading behavior during Thanksgiving.

That drop was also the most impressive in November. At that time, BTC had just exceeded 19,000 US dollars in just 3 days, and it plunged to 16,490 US dollars on November 27, Beijing time (November 26, US time). There was a ridicule of “calling Grayscale to end the Thanksgiving holiday and save the market.”

The above report tracked the data from November 24 to November 30, showing that investors in different trading ranges were buying and selling when that crash occurred.

The report data shows that when a risk occurs, small traders sell BTC and large traders buy. On November 30th (December 1st, Beijing time), when BTC rose to US$19,913, which was the closest BTC to US$20,000 this year, small traders in the range of 0 to 0.5 BTC bought BTC, and the rest Traders in the range are buying.

According to the report, the data shows that although traders who hold a large amount of bitcoin are “in the business of buying low and selling high,” they are not like retail investors who buy bitcoin and wait for a rebound.

OKEx pointed out in the report, “Ultimately, whales try to push the market, get rid of panicking retail investors, and use the opportunity to buy relatively cheap coins.” “For retail traders and others in between, there are only two options. , Follow the trend or go against the trend.”

Crypto-analysis company CryptoQuant also believes that throughout 2020, Bitcoin giants have almost never missed an opportunity to “buy on dips”, and large traders may have prevented the price of BTC from falling further, but promoted the rise, but it may pass Sell ​​BTC at a higher price to make a profit.

So, are they regarded as the grayscale or MicroStrategy of giant whales, are they also savvy players who have recently exited at a high point?

CoinDesk quoted analyst John Todaro as saying that mainstream institutions “have not disclosed data that can indicate selling positions.” He believes that neither MicroStrategy nor Grayscale are sellers of bitcoin. Although institutional funds are part of the reason for the increase in currency prices this year, it cannot be linked to the recent rise in BTC, because institutions usually trade through over-the-counter companies, which has the least impact on market prices.

“However, smaller institutions or a large number of institutions may be less dependent on over-the-counter transactions, and are more likely to use exchanges and even issue large orders that may have a greater direct impact on prices.” Todaro believes, As new large institutions enter the BTC market, the market size of the original small institutions and whales will be squeezed out.

This time, after the BTC broke through another 19,000 US dollars, a group of BTC believers in China has set off an argument: Institutional absorption, price decision power will be controlled by billionaires.

For example, Wan Hui, the founding partner of Primitive Ventures, believes, “As more and more billionaires in the traditional capital market join the Bitcoin Blow camp, it will become increasingly difficult for the mainstream to beat the Bitcoin exchange rate in the future. Future prices It is decided by the wealthy people and other wealthy people they can influence, not by the stock market of internal volume.”

According to the data provided in the report, traders within 10 BTC are not considered “giant whales” compared to the top-tier MicroStrategy BTC holders with more than 100 million U.S. dollars. Those who eat up the funds and BTC in the hands of retail investors are probably still whale investors who are good at “involving” the market.

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