A Bitcoin whale (BTC), An individual investor who owns a large amount of BTC, made a profit after two years. Whalemap data suggests that the whale bought almost 9,000 BTC in the third quarter of 2018.
A pseudonymous trader known as “Byzantine General”, who shared the data, said:
“This whale is a legend. See that big bubble of around 6k in 2018? That’s almost 9k BTC that was accumulated there. She finally took a profit, after 2 years and 2 big capitulation events. “
The whale held onto the BTC for nearly 22 months, through two major phases of capitulation. Bitcoin fell to a level of less than $ 4,000 twice, first in January 2019 and second in March 2020. The investor waited for both periods and eventually sold at around $ 12,000.
Bitcoin number held by a whale. Source: Byzantine General, Whalemap
What does a Bitcoin whale’s profit reserve suggest?
On August 16, Cointelegraph reported that there were large groups of whales in the range of USD 12,000 to USD 14,000. At the $ 12,000 level, many whales are at or breakeven, which could arguably give the whales an incentive to sell.
It is unclear if it shows that the whales are wary that Bitcoin has reached a local peak. Whales, due to the large size of their properties, follow liquidity. If they feel there is enough liquidity to sell, possibly as a result of increased retail activity, they are likely to sell.
Therefore, the sell off of a whale does not necessarily show that Bitcoin has peaked. It could be argued that it increases the chances of consolidation in the short term. But Until BTC drops below key support levels, it is premature to suggest that a local top has formed. Furthermore, it is difficult to estimate how much of the 9,000 BTC the whale sold.
One reason some whales appear to be profiting at current levels could be Bitcoin’s relatively high spot volume. According to another pseudonymous trader known as Bitcoin Jack, the market remains “awkwardly” driven by the spot market. He said:
“The market is still uncomfortably driven by the spot market for now. The market is still relatively high in the chain domain. Therefore, price expansion is imminent again; The direction is unclear, but the low derivatives versus the spot market and the spot exchange versus chain dominance indicate that we have not seen an irrational ceiling. “
When the market is heavily driven by the derivatives market, the whales have less liquidity to seek out and minor pullbacks could cause large price movements.
What short-term traders expect
In the short term, traders remain without consensus on sentiment around Bitcoin. Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange and analyst at Cointelegraph Markets, says that BTC could drop to just $ 10,000 if you lose the $ 11,450 level. He said:
“It’s pretty easy here, as there is a rejection of $ 11,600. If we hold the $ 11,450 – $ 11,500 area, I think we will have a breakout towards $ 12,000 in the next week. Missing the green zone and I’m targeting $ 10,700 or even $ 10,000. “
After a nearly three-fold increase in price, a short-term consolidation phase could strengthen Bitcoin’s long-term momentum.
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