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Bitcoin Pullback Risk Rises as Whales Resume Selling

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Bitcoin’s short-term prospects are looking a little bleak, with blockchain data pointing to renewed selling by “whales” – large investors with the ability to influence markets.

cryptonews.net

  • The number of whale entities – clusters of wallet addresses held by a single network participant holding at least 1,000 bitcoin – fell to a 5.5-month low of 1,943 on Monday, according to data provided by Glassnode.
  • The metric has dropped by 60, or 3%, in the past five days, extending the decline from a record high of 2,237 on Feb. 7. Whale selling had eased off in the second half of April.
  • “The data looks bearish, as it shows a clear trend of whales offloading their holdings,” said Pankaj Balani, co-founder and CEO of the Singapore-based Delta Exchange.
  • From October 2020 to February 2021, the number of whale entities had risen in lockstep with bitcoin’s price, validating the narrative that the rally over that period was the product of increased participation by large investors.
  • Hence, the divergence between the two metrics is a cause for concern for the bulls.

  • Bitcoin’s price has been generally restricted to the $50,000 to $60,000 range since mid-March amid continued selling by whales. In other words, retail investors alone have been struggling to drive the rally.
  • Recent market-wide price action suggests investor focus has shifted from bitcoin to ether and other alternative cryptocurrencies (altcoins).
  • While ether has more than doubled to record highs above $4,100 in the past two weeks, bitcoin has remained comatose below $60,000 and looks vulnerable to a deeper drop unless whales resume buying.
  • Balani predicted a notable correction below $50,000 in the short term. “Monday’s move was quite confirmatory of the impending drop,” he said.
  • Bitcoin fell by over 5% to $53,500 on Monday, putting brakes on the rally in ether and other alternative cryptocurrencies. Ether closed Monday on a flat note at $3,950.

Also read: Ether’s Active Addresses Pass 2018 Peak as Cryptocurrency Soars to New Price Highs

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