On-chain data suggests that Bitcoin (BTC) whales have accumulated bitcoins around $48,000 following the recent dips in the cryptocurrency’s price
The cryptocurrency market experienced a correction towards the end of February, and the BTC price plunged below the $50,000 mark. Bitcoin whales took advantage of the price dip to take more positions in the market.
According to the latest data from CryptoQuant, Bitcoin whales were accumulating the cryptocurrency at $48,000 despite BTC’s price nearly doubling so far in 2021. The trend shows increasing confidence in Bitcoin as its price stabilises around the $50,000 level.
The data is from CryptoQuant’s coverage of BTC outflow from Coinbase Pro. Usually, in bull cycles, the whales take profit on their positions regularly. When whales liquidate their positions, it leads to massive price swings in the market.
However, the current bull cycle is different as the whales are buying bitcoins instead of selling them. This indicates that the whales are confident BTC’s price would move even higher than the current level of $50,000 in the coming weeks and months.
The current institutional buying level stands at $48,000, and BTC price dropping below this level triggered massive purchases from the whales. Ki-Young Ju, CEO at CryptoQuant, said in his tweet, “Whales accumulating $BTC. They are making a lot of bear traps lately, but the price seems to recover the institutional buying level, 48k. Looking at recent Coinbase outflows, most of the outflows that went to custody wallets were at 48k price.”
Bitcoin’s price has nearly doubled since the start of the year, but the purchase patterns show that whales or high-net-worth investors believe the bull cycle isn’t over, and the cryptocurrency might continue to rally.
The current bull cycle is different from that of 2017 because of the entry of institutional investors and other high net-worth individuals and companies. The 2017 rally was sparked and maintained by retail investors, but institutions are buying bitcoins faster than they are mined.
The expansion of monetary supply by numerous central banks globally due to Covid-19 forced companies to look for cash alternatives, and Bitcoin emerged as the number one choice. Tesla and MicroStrategy purchased over $1 billion worth of BTC each this year. Square also increased its position in the market, and more companies are planning to invest in BTC this year.