- BTC whales put selling pressure on the coin in the derivatives market.
- However, a few stats suggested a market bottom, increasing the likelihood of an uptrend.
Bitcoin [BTC] has witnessed a significant drop in transfer volume on the network. An important reason for the calmness in the transfer volume could be the prevailing sentiment in the market.
Since the king of cryptocurrencies has failed to sit comfortably above $30,000 on multiple occasions, investors may want the price of the coin to skyrocket before moving their assets. Amidst this, a significant amount of whale activity was noticed in the BTC derivatives market. This generally indicated increased selling pressure.
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Bitcoin HODLers are not willing to sell
Gustavo Faria, an author and analyst at CryptoQuantpointed out in a restrained analysis that the on-chain transfer volume on the BTC network has noticeably declined since the end of 2022. Surprisingly, the network experienced growth during that period.
This was evidenced by the rise in active addresses while the transferred tokens remained dormant.
Source: CryptoQuant
One possible reason for this could be BTC’s price action. The king coin made several attempts to break the $30,000 mark. Despite succeeding a few times in recent weeks, the coin failed to sit comfortably above the range.
Therefore, HODLers may be reluctant to move their assets at a time when BTC‘s price action was not comparable. It was also interesting to note that while HODLers kept their activity low, a significant influx of institutional investors was observed.
According to the analysis, in a situation where supply is already constrained by HODL behavior and the impending halving, this flood could cause a demand shock.
Bitcoin whales are active
While HODLers’ activity remained low, the same cannot be said for Bitcoin whales. Grizzly, another analyst at CryptoQuant, stated in a recent analysis that BTC whales has been active on the derivatives market since early July. As can be seen from the graph, BTC‘s Exchange Whale ratio witnessed a significant increase.
Source: CryptoQuant
This gain of more than 30% mainly related to the derivatives market. The analysis stated that the increase in BTC deposits by whales to the Binance exchange was most likely the cause of these changes in this metric. This immediately meant that BTC witnessed an increase in selling pressure.
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Take a look at BTC‘s on-chain metrics also suggested that the coin was indeed under selling pressure. For example, Bitcoin’s exchange rate reserve increased, which can be tricky. However, some metrics remained bullish.
BTC’s aSORP was green, meaning more investors sold at a loss. This suggested a market bottom. In addition, the binary CDD was also green, implying long-term shareholder movements over the past seven days were lower than average.
At the time of writing, BTC was trade at $29,388.15, with a market cap of over $571 billion.
Source: CryptoQuant