On-chain data shows that a bullish combination has just formed for bitcoin, which may indicate that a rally is coming for the asset.
Sharks and Whales Are Accumulating Both bitcoin and Tether Right Now
According to data from the on-chain analysis firm Holy, both btc and USDT sharks and whales have been accumulating recently. The metric of interest here is the “Supply Distribution,” which tracks the total amount of a given asset held by different groups of holders.
In the current topic, sharks and whales are the entities of interest. For bitcoin, the combined supply of these assets can be defined as the range of 10 to 10,000 btc, while for Tether, it is generally 100,000 to 10 million USDT.
Sharks and whales are influential entities in the sector due to their holdings, but their role differs between holding the volatile btc or the stablecoin USDT.
The chart below shows how the shark and whale supplies of the two cryptocurrencies have changed in recent months:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/09/This-bullish-combination-has-finally-formed-for-Bitcoin-will-it.jpeg" alt="bitcoin and Tether Sharks and whales” width=”1545″ height=”1056″ loading=”lazy”/>
Both of these metrics appear to have registered an increase during the past few days | Source: Santiment on X
The chart shows that bitcoin sharks and whales have engaged in some accumulation recently, bringing their supply to 13.03 million btc, a new high for the year.
Interestingly, while this accumulation has occurred, Tether sharks and whales have also expanded their holdings. The metric’s value, in this case, reached a six-week high of 15.03 billion USDT.
The significance of the trend in btc shark and whale supply may seem simple: these huge entities are buying right now, so it should be bullish for the price. But what about the pattern shown by the USDT cohort?
Generally, an investor can purchase a stablecoin like USDT to avoid the volatility of assets like bitcoin. Once these holders feel that the prices are correct to return to the volatile side of the sector, they exchange their fiat-pegged tokens for the desired currency.
Naturally, this change can put buying pressure on any cryptocurrency they are trading. For this reason, one way to view the supply of a stablecoin is as a measure of the potential purchasing power available for bitcoin and other assets on the market.
Thus, the latest accumulation of Tether would suggest that sharks and whales have increased their purchasing power. Sometimes spikes in this indicator come at the expense of the corresponding btc metric as these holders convert their reserves. While purchasing power increases in the future in such a scenario, it has only come at the expense of a btc sell-off.
However, in the current case, both indicators have trended upward at the same time, meaning that not only sharks and whales have participated in some bitcoin purchases, but also the capital reserves that these large holders can deploy in the asset in the future. Tether forms have also increased. “This is generally a bullish combination,” explains Santiment.
btc Price
bitcoin had previously risen above the $27,000 level, but the asset has retreated in recent hours and is now trading around the $26,700 mark.
<img decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/09/This-bullish-combination-has-finally-formed-for-Bitcoin-will-it" alt="bitcoin price chart” width=”1534″ height=”877″ loading=”lazy”/>
btc has already retraced some of its recovery | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, Charts from TradingView.com, Santiment.net
