Bitcoin: Analyzing the contrasting trends of whale, shark accumulation
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Bitcoin’s market dynamics reveal divergent accumulation strategies as supply on exchanges dwindled.
Bitcoin sharks accumulated around 254% BTC while whales released around 70% in the past weeks. BTC supply on exchanges recently hit a five-year low.
Over the past few weeks, the price of Bitcoin [BTC] has set off a chain reaction of diverse activities across various metrics. Among these, the accumulation trend was a crucial factor that could greatly influence the future trajectory.
According to data provided by Glassnode, whales and sharks displayed distinct behaviors in their accumulation strategies throughout this price trend.
Sharks, Whales show divergent Bitcoin accumulation.
Data from Glassnode shed light on the divergent actions of various Bitcoin holders in the past few weeks. The information revealed a contrasting landscape where different entities are making distinct moves.
Miners, facing a decline in revenue, have been releasing more of their BTC holdings. In contrast, entities with a balance of less than 100 BTC actively increased their holdings, exhibiting a significant upward trend. These entities absorbed an astonishing 254% of the mined supply recently.
Shark entities, characterized by wallets holding 100 to 1,000 BTC, also witnessed positive balance changes. They have absorbed a substantial volume, equivalent to 36% of the mined supply.
However, when it came to whale entities, which encompass wallets holding over 1,000 BTC, they were aligned with miners as net distributors. This meant they had released a volume equivalent to 70% of the mined supply from their holdings.
Taken as a whole, the market seemed to be experiencing a phase of subdued accumulation, indicating an underlying demand despite the prevailing regulatory challenges.
Supply on exchanges drop despite accumulation
A noteworthy trend emerged after examining the percentage of Bitcoin supply held on exchanges in relation to the total supply. Despite the accumulation efforts by various entities, the supply of BTC on exchanges had decreased.
As of this writing, the supply on exchanges metric stood at 5.60%, showcasing a significant and sustained downtrend. This decline can be traced back to around 18 June and has persisted since then.
Furthermore, the current decrease represents the lowest level observed in over five years. This decline in supply on exchanges carries important implications.
It suggested that a substantial portion of the BTC accumulated during this period was withdrawn from exchanges. Such a development indicated bullish sentiment among holders, as they anticipate a future increase in the price of Bitcoin.
Direction of the flow, price trend of Bitcoin.
Examining the Bitcoin Exchange Netflow chart revealed a consistent negative netflow for the asset in recent days. Starting from 15 June, BTC has been experiencing negative netflow, indicating a higher number of withdrawals than deposits.
As of 21 June, the netflow showed a negative value of approximately 7,800. However, a slight positive netflow of around 818 was observed as of this writing.
Furthermore, on a daily timeframe chart, Bitcoin was still trading within the $30,000 price range. It gained nearly 1% in value since the previous trading session, where it had closed at a loss.
Also, Bitcoin was currently in the overbought zone, suggesting a potential likelihood of a correction in the future.
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