Bitcoin has fallen below the $25,000 level over the last day as data on the network shows signs of increased activity from whales.
The number of bitcoin whale transactions has skyrocketed recently
According to network analytics company Saint, yesterday, whale activity reached its highest level in four months. The relevant indicator here is the “whale transaction counter”, which measures the total amount of transfers taking place on the Bitcoin blockchain worth at least $1 million.
When the value of this metric is high, it means that a large number of whale transactions are happening on the network right now. Such a trend shows that these huge holders are currently showing an active interest in cryptocurrency trading.
Since the sheer scale of the coins involved in whale transactions can be quite large, a significant number of them happening at the same time can cause noticeable fluctuations in the price of an asset. For this reason, high numbers of whale transactions may portend high asset volatility in the near term.
On the other hand, when the indicator is low, it means that the whales are not very active at the moment and therefore may not show much interest in BTC. Naturally, such a trend may precede a calmer market.
And now here’s a chart showing the trend in the number of bitcoin whale transactions over the past few months:
The value of the metric seems to have been quite high in recent days | Source: Santiment on Twitter
As shown in the chart above, the number of bitcoin whale transactions has increased significantly as the latest spike in the price of the cryptocurrency took shape.
The indicator value reached its highest value since November 2022, about four months ago, when the price of BTC peaked near the $26,500 level, which is a 9-month high for the asset.
Since the number of whale transactions cannot distinguish between sell and buy transfers, elevated indicator values alone are often not enough to tell exactly what behavior these investors are exhibiting, only that they are currently active.
However, some information can be gleaned from looking at the accompanying price trend. For example, during a price drop a week or so ago, whales made a large number of transfers, after which the asset hit a local low and rallied sharply, suggesting that transactions may have been aimed at accumulating at the low. Prices.
In this case, however, the value of the asset has fallen due to the surge in whales and the price is now below the $25,000 mark, which could mean that a good portion of these transactions may have been for sale purposes.
If so, it would appear that these bitcoin whales may have taken the recent price spike as simply an opportunity for quick profit-taking rather than a push for long-term growth.
Bitcoin Price
At the time of writing, Bitcoin is trading around $24,700, up 12% over the past week.
Looks like the price of the asset has shot up over the past couple of days | Source: BTCUSD on TradingView
Credit : www.newsbtc.com
