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Report: Bitcoin Whale Trend Threatens Possible Liquidation

For several days in a row, the price of BTC remains in the range of $23,000 dollars for each coin. That relative stagnation could be close to changing with the current trend of Bitcoin whales. This report analyzes the orders of the last 7 days.

For this edition, the operations carried out by the large accumulators from January 18 to 24, 2023 are counted. Likewise, transactions of $500 BTC and above are included. The reason is that those smaller transactions, taken together, carry significant weight.

In any case, as is customary, the data is taken from Whale Alert and WhaleBot Alert. It should be noted that they are public and verifiable in the chain of blocks or in the named accounts. Their interpretation is the responsibility of this medium.

This was the trend of Bitcoin whales during the last 7 days

The Bitcoin whale trend has a fundamental weight in the price of that digital currency. However, the movements of the last week are not suggestive at all with the trading value of the digital currency created by Satoshi Nakamoto.

Most of the transactions of 500 BTC and above went towards possible settlement, that is, from unknown wallets to exchanges. When this happens, there is likely to be a bearish signal in the price of the cryptocurrency. In this way, of the 117,540 bitcoins traded in that time frame, some 65,787 had exchanges as their port.

At the same time, a total of 35,024 coins moved in the opposite direction (accumulation). Taking this imbalance into account, the question arises: Why didn’t the price of BTC fall if it is an overwhelmingly bearish signal?

The answer to this has to do with the caveat of “possible” liquidation. In other words, when there is a trend of Bitcoin whales towards exchanges, it does not necessarily mean a sale. For many reasons, large hoarders may send their coins to centralized platforms. One of them is the performance offered by some of these.

Thus, if an exchange offers an APY of 5% or 10%, holders will be better off holding these returns than just holding. Thus, the movement of unknown portfolios to an exchange cannot be counted as a mechanical sale, but as a “possible” liquidation.

Bitcoin Whales Trend Towards Possible Liquidation
The movement of the Bitcoin whales suggests a high possibility of liquidation. Source: Whale Alert/WhaleBot Alert

The effectiveness of accumulation

On the other hand, when coins go from exchanges to unknown wallets, it is 100% sure that they have an influence on the price. In that sense, if the trend these last 7 days had been the other way around, the BTC price would be rising again.

On the other hand, at this time, the table is set so that any eventual big sale will push the price back. If this happens, some of these whales that moved their coins to exchanges could get nervous. Thus, with the coins on those platforms, the chances of liquidating them are much higher. For investors, this should be taken as a sign to be vigilant and react quickly to any price eventuality.

All this context suggests that the current trend given by the whales on the price of Bitcoin is of a high probability of sale. As indicated in the graph above, of all the bitcoins traded between January 18 and 24, 55.97% are on the verge of liquidation, while the accumulation is only 29.8%. At the same time, movements between unknown portfolios occupy a timid 14.2%, which is irrelevant to the price of the currency.

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