Posted:
- Coinbase Premium saw a downward trend in December.
- Whales had significantly reduced their long exposure.
Bitcoin [BTC] climbed back above $43,000 in the past 24 trading hours, with the market poised to retreat for the year-end festivities at a high. At the time of writing, BTC was at $42,931 with a significant 24-hour gain of 4.51%, according to CoinMarketCap.
At the time of writing, nearly $26 billion worth of BTCs were exchanged, causing a 38.54% spike in daily trading volume.
The trading activity was most likely driven by greedy buyers, as observed by AMBCrypto using Hyblock Capital’s data. The traders were hoping to multiply their investments by January 2024, when several spot Bitcoin ETF applications could get the green light.
Source: Hyblock Capital
However, amid the optimistic mood, some alarming signs caught the attention of market experts.
American Whales are not as bullish as they used to be
Coinbase Premium, one of the popular indicators for tracking the movement of institutional whales, showed signs of bearishness.
According to AMBCrypto’s analysis of the measure created by CryptoQuant, a sharp decline in the accumulation patterns of US investors was observed over the past week.
Source: CryptoQuant
Coinbase is the largest cryptocurrency exchange in the US and the top choice for professional investors to trade digital assets.
The downward trend therefore suggested that whales were not buying as much as normal, or possibly selling their possessions.
CryptoQuant observed the cold shoulder of whales and said:
“So when the price of Bitcoin rises amid high open interest and a declining Coinbase Premium Index, it often signals an overheated market.”
A bigger trend?
AMBCrypto scanned the Whale vs. Retail Delta indicator from Hyblock Capital and noticed a similar story at Binance [BNB]. Whales had significantly reduced their long exposure in December.
Source: Hyblock Capital
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Additionally, Open Interest (OI) in BTC futures on the world’s largest Bitcoin derivatives exchange, CME, fell 8% over the past week. CME’s standard Bitcoin Futures contract is worth five BTC and a barometer of institutional interest in cryptocurrencies.
Source: Coinglass
It remains to be seen whether this is just a year-end blip or part of a developing trend that could continue into 2024.