Bitcoin (BTC) is struggling on the price chart, and the latest data from IntoTheBlock shows that whales – large investors holding a significant portion of BTC supply – have begun to reduce their holdings. Specifically, the total amount of BTC held by whales has dropped to its lowest level since 2019, marking a low in the past six years.
This decline is not just a number but also reflects a significant change in market dynamics. As the supply held by whales decreases sharply, this implies that they are actively participating in the market to sell. The reason could stem from institutions needing to liquidate assets to cover operational costs as prices fall, or large investors are closing entire positions to wait for new buying opportunities.
The significance of the supply change held by whales
The change in this supply dynamic brings many important implications. First of all, it indicates that assets are being redistributed from whales to retail investors. This could promote decentralization in the market while reducing the influence of whales on price trends.
Additionally, if whales sell while market demand remains high, this indicates that supply is being spread to a broader group of investors. Data on Bitcoin net flow on exchanges also reinforces this view. The market is currently witnessing more outflows than inflows, reflecting strong demand for BTC. This is crucial for maintaining price stability, even as selling pressure from whales increases.
Forecasting the next price volatility of Bitcoin
With whales shifting to sell, the question arises: What will happen next to BTC prices? Although the supply from whales has decreased, Bitcoin is currently not facing strong selling pressure.
Data shows that the rate of net inflows to exchanges has decreased over the past week, meaning that the number of deposits to exchanges is lower. This indicates that current investors do not intend to sell but instead are holding BTC with a long-term strategy.
As whales sell while most other investors continue to hold, the market is likely to enter an accumulation phase. During this phase, buyers will absorb selling pressure without pushing prices higher. However, the current buying strength is not strong enough to absorb selling pressure while pushing prices above larger resistance levels.
According to analysis from Alphractal, to maintain accumulation momentum, BTC needs to hold above $84,640. If the price can accumulate above this threshold, Bitcoin is likely to form a local bottom before moving towards new all-time highs in the near future. Conversely, if the price remains below $84,000 for a few days, the next target will be $64,700 – coinciding with the historical peak in April 2021, according to the number of days the cumulative value was destroyed (CVDD).
Conclusion
The decrease in supply from whales is an important signal, reflecting a change in market dynamics while also opening opportunities for retail investors. However, to determine the next trend for Bitcoin, the market needs to await clearer signals, particularly the ability to hold prices above key support levels. In this context, the accumulation phase may continue, laying the groundwork for Bitcoin's further advances in the future.
