On-chain data suggests that bitcoin whales just participated in a large distribution, but the price of the asset has managed to hold up so far.
bitcoin whales are selling off, but sharks are adding to their holdings
According to data from the on-chain analysis firm Holy, large btc wallets are showing an interesting pattern right now. The relevant indicator here is the “Supply Distribution”, which tracks the total amount of bitcoin currently held by the various wallet groups.
Addresses are divided into these cohorts based on the number of tokens they carry. The 1 to 10 coins group, for example, includes all wallets containing between 1 and 10 btc.
In the context of the current topic, two cohorts are of interest: sharks and whales. Early investors are typically defined as those holding between 100 and 1,000 btc, while the latter group includes those holding between 1,000 and 10,000 btc.
Since both cohorts have such large balances, it is worth monitoring their behavior as it may end up having effects on the broader market. Naturally, whales are the much more powerful of the two, containing significantly larger quantities.
The following graph shows the trend in the distribution of bitcoin supply for these two large groups of investors over the last few months:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-Whale-Holdings-Plunge-But-Price-Holds-at-62000.jpeg" alt="Sharks and whales bitcoin” width=”2684″ height=”1786″/>
Looks like the two metrics have gone opposite ways recently | Source: Santiment on X
As shown in the chart above, bitcoin whales appear to have dumped a large number of coins from their holdings when the latest rally in the cryptocurrency's price occurred.
In total, these huge entities have distributed around 75,500 btc. While the whales appear to have participated in this sell-off, the sharks have instead seen a strong upward trend in their supply.
This cohort has collected 78,100 btc during this accumulation wave. Curiously, the amount that the whales have sold is almost the same as that of the sharks. This may be due to one of two things.
The first possibility is that the sharks simply bought these tokens from the whales. The other scenario, and perhaps the most interesting, is that the “selloff” is not actually a selloff but rather the result of the whales breaking up their wallets.
This redistribution of holdings into many smaller portfolios can naturally cause the type of effect just seen in the market. And given the symmetry, this could, in fact, be a likely possibility.
Now, why would whales display such behavior? As Santiment explained in a reply to a user who asked the same question, whales may be moving smaller chunks on or off exchanges, or they may simply be taking security precautions.
Since the price of bitcoin has wobbled after the formation of this trend, some selling would have still occurred, but it seems that the market has not had too much trouble absorbing this selling pressure so far as the price of btc has has remained relatively good.
btc Price
bitcoin had fallen to the low levels of $60,000 just before, but the coin seems to have already recovered as it is now back at $62,400.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://www.tradingview.com/x/rBRiT3sN/" alt="bitcoin price chart” width=”1534″ height=”854″/>
The price of the coin has enjoyed a sharp rally over the past few days | Source: BTCUSD on TradingView
Featured image by Mike Doherty on Unsplash.com, Santiment.net, TradingView.com chart