How is Bitcoin whale’s behavior different in the 2017 bull market from 2021?

According to the data, the amount of BTC used by whales to influence and move the market in 2021 is greatly reduced compared to 2017.

The following on-chain analysis will examine the significant behavioral changes between the Bitcoin price in the 2021 cycle compared to the 2017 cycle.

Accumulation and distribution

In general, there is another generation of whales / big players in the current cycle, often referred to as “smart money”, which follow different accumulation and distribution patterns.

This process has 2 phases:

• Accumulation: when seasoned stakeholders buy at lower prices (usually due to fear, uncertainty, and doubt (FUD) from new entrants).
• Distribution: when demanding market makers sell to new investors at a premium.

If we observe the behavior of these players in 2017, we can see that they repeat the pattern of accumulation and distribution with 15-35% of the supply (the total Bitcoin circulating in the market at that time) in 3 waves, as in shown in the following graphic.

wave HODL vRealization for Bitcoin (Road to7. Moving Average Day) | Source: Glassnode

2017 and 2021: Where’s the difference? and why?

What is interesting, and different between the 2017 cycle and the 2021 bull cycle, is that the same players (most likely institutional investors) are currently not delivering more than 5% of their accumulated total in the diagram above.

In fact, despite the recent market slump that began after Bitcoin price hit an ATH at nearly $ 65,000 in mid-April 2021, they own about 30% of total supply. At the time of writing, BTC has lost about 50% of its all-time high.

The conservative (distributive) spending dynamics can also be seen in the Spent Output Age Band diagram, as can be seen in the following graphic. The indicator shows the percentage of the total coins that are held in a certain period of time (here 1-3 months).

Course of study Issue age pepper (7 moving average) Day) | Source: Glassnode

When the indices peak it means that these coins are being transferred (or spent) more than usual. As can be seen in the graph above, the level of activity attributed to the Bitcoin whales during the local peak is significantly reduced in the current cycle compared to 2017.

One explanation for this change is the higher availability of futures and stablecoin markets, which allow smart money to leverage large amounts of money and use a small fraction of their BTC as collateral to move the market.

Minh Anh

According to Cryptopotato

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