Whales vs. Retail Behavior

Our Whales vs. Retail Behavior template is very telling at the moment. It is no secret that large institutional holders and massive whale addresses (represented by the blue line below) have been dumping their Bitcoin holdings for one year straight now. They had been accumulating quite heavily up until late 2021 before taking profit in late October right before the final all-time high in early November.

Now, a year later, after the bloodbath ensued and Bitcoin's price is -58% in 2022 alone, we are looking for signs of large traders potentially ready to jump back in and push prices up once again after this long ranging period.

One thing that was giving traders hope was the fact that large stablecoin market caps were growing through May of this year (represented by the yellow area chart above). But when FOMC interest rate hikes and recession scares began to really take hold of investors' speculative decisions, it became much harder for large holders to justify keeping such a large amount of dollar-pegged crypto on the sidelines.

The very likely implication is that these large institutions and whales are holding their money in US and world treasuries instead. Crypto is simply too unappealing to them (for now) with so much uncertainty that has been going on throughout 2022. Bulls will want to watch and see whether the largest stablecoins begin to see increases in their market caps once again. If they do, Bitcoin and crypto prices can justify a rise even if whale supply if Bitcoin and Ethereum stay low.

And speaking of Ethereum, we have seen that the top 10 addresses in crypto now hold well over a quarter of the total supply, rising approximately 3% of the supply holdings they held one year ago:

However, the key whale address tiers that aren't largely holding their supply on exchanges, have not been showing much sign of accumulation since the merge:

There are plenty of factors that can push crypto market caps upward even with the key whales sitting on the sidelines right now. But with key players holding tight and continuing to mildly dump their Bitcoin, Ethereum, and stablecoin holdings, it can still be dicey waters for a bit longer.


Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.


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