bitcoin has managed to recover above the $44,500 mark, but what is driving this rise? This is what the on-chain data suggests.
bitcoin is up more than 4% to approach the $45,000 level
After weeks of struggling at lower levels, bitcoin finally appears to be showing fresh bullish price action as the asset is now approaching a retest of the $45,000 level after rising over 4% over the past day.
The following chart shows the performance of the currency over the last month:
<img decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/02/Bitcoin-Surpasses-44500-What-Is-Causing-This-Rise" alt="bitcoin price chart” width=”1534″ height=”854″/>
The value of the asset seems to have sharply shot up over the last 24 hours | Source: BTCUSD on TradingView
You can see from the chart that this is the first time the cryptocurrency has reached these levels since the crash following the launch of spot exchange-traded funds (ETFs). There are many factors contributing to the rise of the asset, but a major reason can be found in on-chain data.
btc whales have been piling up recently
According to data from the on-chain analysis firm Holy, btc whale holdings have seen a sharp rise recently. The relevant indicator here is “Supply Distribution”, which tracks the percentage of the total bitcoin supply that each group of wallets currently holds.
Addresses are divided into these cohorts based on the total number of coins they currently have in their balance. The 1 to 10 coins group, for example, includes investors who own between 1 and 10 btc.
In the context of the current topic, “whales” are of interest. These are huge entities that carry at least 1000 btc in their wallets. At the current exchange rate, this amount is worth more than $44.8 million.
Because these properties are so large, whales can naturally have some influence on the market. For this reason, it may be worth keeping an eye on what these big forks are up to.
The chart below shows how the bitcoin supply distribution has changed specifically for these whales in recent years:
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/02/Bitcoin-Surpasses-44500-What-Is-Causing-This-Rise.jpeg" alt="bitcoin Whales” width=”2730″ height=”1802″/>
Looks like the value of the metric has been climbing up in recent days | Source: Santiment on X
As shown in the chart above, the percentage of bitcoin supply held by whales has been on an increasing trend recently, suggesting that these large investors have been expanding their holdings.
Over the past four weeks alone, whales have added 1% of the total supply to their wallets. Following this jump, these huge entities now control over 40% of the cryptocurrency supply, the most in over fourteen months.
It would seem that while the overall market was panicking over the post-ETF approval scramble, these big hands were quietly gobbling up supply at lower price levels.
Although not the only reason, this accumulation by whales would likely be one of the impetus behind the currency's latest rally. It now remains to be seen if this cohort will continue to support bitcoin in the coming days or if they will sell here to reap their profits.
Featured image from Shutterstock.com, Charts from TradingView.com, Santiment.net
