After a series of surges, the price of Bitcoin slipped below the $20,000 level last week. However, data suggests that the investors have looked up to this occasion as a time for investing in the asset.
According to a recent report from Santiment, an on-chain analytics firm, two cohorts have been speedily acquiring Bitcoin as the value of the asset plunged. The report said that Bitcoin whales and sharks have raised 40,557 Bitcoins worth a staggering $821.50 million in the past week.
The Bitcoin whales and sharks are terms for referring to wallet addresses holding 10 to 10,000 Bitcoin. With the heavy accumulation from the largest asset holders, the firm suggests investors keep an eye on the traditional markets for clues on what comes next for Bitcoin. It stated:
Bitcoin sharks and whales don’t appear to be to blame for crypto’s rough week. In fact, addresses holding 10 to 10,000 BTC have collectively accumulated $821.5 million back during this mid-sized crash. Crypto’s correlation with equities is what to watch.
According to the analytics firm, traders have shifted their focus on Bitcoin at the expense of altcoins following last week’s pullback. Furthermore, the report says that the behavior change could be a signal that a crypto market reversal is in sight. Quoting the report:
Crowds are focusing back on Bitcoin. This is the highest ratio of Bitcoin vs altcoin discussions since July 2022. High Bitcoin discourse is a sign of fear, which historically can turn around markets.
Additionally, data from past weeks suggested that the interest of the investors had shifted from the king of cryptocurrency Bitcoin to Ethereum largely. As of February 26, data suggested that around 39% of the total supply of Ethereum is concentrated among large addresses i.e. whale wallets. This is in contrast to Bitcoin, where whales hold only 11% of the total supply.
Also, in terms of investor behavior, large cohorts like whales and sharks have always preferred to accumulate assets when the prices plunge. The Bank of International Settlements (BIS) published a report in November when the crypto sector was going through the FTX fiasco.
The report which studied investors’ patterns said that in times of increasing prices, smaller investors purchased whereas the larger holders (like the whales) sold, thus making profits from the smaller investors’ expense. At the time of writing, Bitcoin is trading at $22,150, a 0.28% decline from the past day whereas a 2.08% surge over the past days.