Bitcoin Will Trend Lower Because Whales Are Still Selling
The impact of bitcoin whales and their activities has always been felt in the general market. This goes from buying to selling, and just the way they move their coins. Once again, these whales still hold sway in the market and their activity could spell a bottom signal.
Santiment Says Bitcoin Whales Are Selling
In a recent community post on the Santiment website, the activity of whales is analyzed in depth. This time around, a look at the balances of large holders shows that they are still selling. These whales who hold between 1,000 and 10,000 BTC have reduced their holdings from almost 8 million BTC back in December 2021 to less than 7 million BTC in December 2022.
Even in the last couple of months, they have reduced their balances by more than 200,000 BTC, showing that they are still selling. Given this sell trend among these large holders, the report predicts that the market will see “sideways or even lower prices for BTC in the next 6-12 months.”
BTC whales are still selling | Source: Santiment
If this selling from large investors flows into 2023, then it is likely that the digital asset would start out the year seeing prices below $16,000. It is also important to note that the analysis in the report of whale addresses shows that the bottom of the market may not be reached yet.
BTC Bottom Is Still Not In
Now, the activity of whales is important to watch as accumulation by them could lead to a rally, and vice versa. One of the ways to try to pinpoint the bitcoin bottoms is with whale activity. At the very bottom of a bear market or at least close to it, whale address activities have historically declined.
However, the Santiment report notes that the average 7-day transaction count was still hovering around 10,000 presently. Compared to the previous bear markets when the market had marked its bottom, whale transaction counts had declined to 1,200 and 2,500.
“This may mean that we need to wait for the average to drop further before we can conclude that even the big players are giving up,” the report reads.
BTC price succumbs to selling pressure | Source: BTCUSD on TradingView.com
Another metric that the report points to is volume gaps. These usually show where the whales are accumulating and unfortunately, both volume gaps identified in the report lie well below the current trading price of bitcoin. The two key gaps identified were the $14,600 and $12,200 price levels, which could be a possible accumulation level for whales.
Essentially, the advice was to put off buying until whale transactions fall lower, as well as wait for the current selling pressure to subside. “To sum up, the activity of BTC whales and the presence of volume gaps at 14,600 USD and 12,200 USD may be worth watching,” Santiment said.
Featured image from Crypto Insiders, chart from TradingView.com