The data shows that institutions are accumulating bitcoins in large amounts in the range of $ 12,000 to $ 15,000, which analysts from Whalemap say is a positive trend because institutions and whales tend to pool assets with a long-term investment strategy in mind.
The fact that big hands are piling on BTC instead of retail investors also explains the rather weak prevailing interest in Bitcoin, as Cointelegraph previously mentioned. Several indicators, including Google Trends, have shown weakening crowd demand for BTC, despite equivalent growth in recent months.
Institutional “FOMO” makes Bitcoin’s rally today stronger than in previous cycles.
Whale map analysts described the recent increase in demand for Bitcoin from whales as a “institutional FOMO”.
FOMO, apart from the fear of being lost, indicates a trend in which investors are increasingly buying an asset in fear of its continued growth. Citing a graph showing whale concentrations and whale book flow, the analysts said:
“These are levels, and this is what institutionalized FOMO looks like.”
Bitcoin Whale Groups to 2020. Source: Whalemap
Whale groups happen when whale addresses – addresses that contain more than 10,000 BTC – buy bitcoins and don’t transfer them for long periods.
This indicates that the whales plan to keep their latest BTC purchases in their personal wallets. Whale Map analysts said:
“The bubbles show the prices at which the whales bought Bitcoin, which they are currently holding.”
The whale’s large bitcoin buildup is likely due to two significant trends that have been present in the cryptocurrency market since October.
First, the recent rally has seen a sharp drop in short laps. During the previous clusters where BTC broke out, contracts worth over $ 100 million were settled on the major exchanges. This indicates that the spike was not a short squeeze, but rather an actual build-up phase.
Second, the spot market was the leader in the derivatives market, not the other way around. When BTC’s price rises, BTC’s funding level rarely exceeds 0.01% on average.
The low funding rate indicates that the futures market is short-lived, and it shows that demand is coming from other sources.
This beef market will be more stable than it was in 2017.
In addition to the increased participation of whales and organizations, the total volume has increased significantly during the recent rally.
Data from market analysis firm Santiment also shows that Bitcoin’s volume is around $ 31 billion, which is significantly higher than January 6, 2018. At that time, Bitcoin’s price also fluctuated around $ 16,350.
Santiment’s analysts found that the continuous rally has a greater volume than the 2017 rally. Analysts wrote:
“When Bitcoin hit $ 16,350 on CoinbasePro an hour ago, we are now at its highest price in 34 months (Jan 6, 2018). Average daily trading volume for this week was $ 31.0 billion versus $ 18.5 billion.”
According to a Cointelegraph report, Bitcoin remains a short-term barrier to whether whales sell for $ 17,000 resistance. Some analysts say there is no apparent resistance reaching the $ 18,500- $ 20,000 range, which means that the all-time high could be much closer than most people expect.