Bitcoin on chain analysis: whales keep accumulating

Bitcoin Magazine will look at Bitcoin’s On-Chain Index (BTC), more specifically the change in Exchange Net position and the amount of BTC held by whales.

The Exchange Net Position Change indicator measures whether there is an inflow or outflow of BTC to accounts connected to exchanges. At the end of the market cycle, there is usually a large outflow of such accounts as holders buy cryptocurrencies and move them to a cold store. On the flip side, there is usually a large inflow of cash in rallies when long-term owners take profits.

In the current bull market, which began in 2020, there are three distinctive periods of inflows.

The first wave (black circle) occurred in August 2020 when BTC broke above the $ 11,000 resistance area. Initially, the inflows rose in height, but this appeared to be fleeting as large amounts of BTC were withdrawn shortly afterwards (red circle). This could be due to renewed confidence in the market after the rally got stronger.

The second fall (yellow) is much smaller and comes after BTC just hit a new all-time high of over USD 20,000. There was minor profit taking before the net position returned to the runoff zone.

The third (in blue) was the largest, and investors were actively taking profits after many assumed that Bitcoin had peaked. Unlike the previous two, this happens when the price falls.

So far, the change in the current net position seems to reflect the second phase (yellow) as BTC has just moved above the all-time high and the indicator seems to have returned to the line zone.

The source: Glass knot

The amount of BTC in the hand of the whale

The CEO of Moskovski Capital, Lex Moskovski, has tweet an overview of the offer of accounts with balances between 100 and 1000 BTC.

This number has been rising steadily since February 2021 and reached a new all-time high in October.

Interestingly, the supply of such accounts did not decrease at all during the May / June crash, on the contrary, it has remained stable, which shows that large investors still believe that Bitcoin will reach much higher levels in the future.

Hence, the current inflow is likely to be due to retail investors and this will not materially affect the price of Bitcoin.

The source: Glass knot

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