Are Whales Setting Sail, or Predicting a Crypto Fail?
So you'd like to trade with a "follow the leader: approach, eh? Well, the first question one is going to ask you, especially in a mainly anonymous sector, is... "Do you actually know who to follow?"
Well, thanks to Santiment's supply distribution data, the answer you can confidently fire back their way can be "to a good enough extent."
We all know that Bitcoin essentially allows the rest of crypto to sink or swim. We have consistently covered the specific BTC whale addresses that hold anywhere between 100 to 10,000 BTC. At the time of this writing, there are 15,848 such addresses.
By comparison, there are 43,460,000 total Bitcoin addresses at this time. This means that key whale addresses, who typically make decisions that lead future price movement, make up 0.0364% of all BTC addresses.
Is this a particularly important number? Not particularly. But when the ratio of whale addresses vs. all addresses rises, it does theoretically imply that there is more interest in a rise from the kinds of traders who are not only millionaires, but are used to using their capital to get what they want.
Furthermore, we have seen 159 new addresses holding between 100 to 10,000 BTC in just the past three weeks. This is the fastest growth of these addresses in 10 months, which was right as FUD was peaking after the Russia-Ukraine war was announced to the world.
But do you want to see a much more interesting rise? The below chart illustrates the percentage of supply held by key price moving addresses for BTC, USDT, USDC, BUSD, and DAI. That's right, we've got five different assets all doing their best to reveal the future to us, all in one chart:
There is a lot going on here. So let's do a quick breakdown:
- The green vertical bars represents the daily close price of BTC over the past year
- The green area chart represents the percentage of supply held by the key BTC addresses holding between 100 to 10,000 BTC
- The red line is the supply of Tether (USDT - stablecoin) held by addresses with $100,000 to $10,000,000.
- The orange line is the supply of Binance USD (BUSD - stablecoin) held by addresses with $100,000 to $10,000,000.
- The blue line is the supply of USD Coin (USDC - stablecoin) held by addresses with $100,000 to $10,000,000.
- The yellow line is the supply of Dai (DAI - stablecoin) held by addresses with $100,000 to $10,000,000.
When these lines are mainly going down, it's not a great sign. Because wealthy players and institutional investors are exiting the markets. When the lines are going up, more big players are coming back into crypto, and buying power is increasing.
For about 14 straight months, Bitcoin's whales have been reducing their supply held and dumping after the wildly bullish 2020 and 2021 that crypto experienced. Prices have been falling in tandem with these dumpoffs.
However, we may be seeing a turnaround now. Not necessarily with prices just yet... but at least with whales finally accumulating rather than dumping As mentioned earlier, we have seen the largest streak of new BTC whale addresses being created in 10 months. But additionally, 40,747 more Bitcoin (worth $726 million) have collectively entered these key whale wallets in just the past 9 days.
And as for stablecoins, we have just seen massive sudden jumps in the key $100k to $10m USDT and BUSD wallets worth $100k to $10m:
- Tether's key addresses have collectively accumulated $817.5 million more in buying power in just the past 3 days, a +7% increase to what they were holding before December 10, 2022
- Binance USD's key addresses have collectively accumulated $104.9 million more in buying power in just the past 3 days, a +9% increase to what they were holding before December 10, 2022
These are absolutely massive upswings, and the chart above certainly illustrates that. All in all, we have reasons to be excited as we head into the final couple weeks of 2022. Anything can happen with prices as news continues to break about FTX funds, the Ukraine-Russia conflict continues, and covid still persists.
But based on fundamentals, these are great signs that crypto is far from dead.
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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