Bitcoin Whales Showing Different Behavior From Past Cycles, But Why?

Keshav Verma

Last Updated: June 11, 2024 7:17 am

3 mins read

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On-chain data suggests the Bitcoin whales have been showing different behavior regarding exchange inflows from the last cycle. Here’s why this may be so.

Bitcoin Whales Are Showing Different Behavior In Exchange Inflows This Time

As an analyst explained in a CryptoQuant Quicktake post, the BTC whales’ movements have been different this time compared to the previous cycle.

The indicator of interest here is the “exchange inflow,” which tracks the total amount of Bitcoin being transferred to wallets attached to all centralized exchanges. In the context of the current discussion, derivative platforms are specifically of interest.

When this metric’s value is high, it means that investors are depositing large amounts on these exchanges. Such a trend usually suggests a high demand for the services these derivative exchanges provide.

Generally, extraordinary spikes in the indicator are associated with whale movements, given that only these humongous holders can cause such large shifts.

On the other hand, when the metric has a low value, it suggests that the whales aren’t depositing anything significant to these platforms, a possible sign that they don’t want to take risks on the derivative side.

Now, here is the chart shared by the quant, which shows the data for the Bitcoin exchange inflow for derivative exchanges:

The value of the metric seems to have been relatively low in recent days | Source: CryptoQuant

The indicator in the above graph also has another condition attached: it only tracks the inflows coming from the whales that had been holding for at least 1 month and at most 3 months.

These would be the newbie whales in the market, but not quite so new that they have only bought (those with a holding time of less than 1 month). Restricting this time range also excludes the data of the traders who make a high amount of moves in short timeframes on average.

As the analyst has highlighted in the chart, the whales in this group have usually made large inflows to derivative platforms around notable cryptocurrency tops and bottoms, when speculation is at its height.

Interestingly, though, the cryptocurrency has witnessed no such large inflow spikes this year even though the asset has broken past the previous all-time high (ATH).

One explanation may be that the whales are not interested in making any real moves right now. However, a more likely reason may be that spot exchange-traded funds (ETFs) exist now.

The spot ETFs hold Bitcoin on behalf of their customers and let them gain indirect exposure to the cryptocurrency in a way familiar to conventional investors.

The ETFs have brought significant demand into the asset and have quickly become an important part of the market. It’s possible that, with this new investment vehicle, the usual cryptocurrency exchanges no longer have the same relevance for the asset.

This could be why the pattern that held during the previous BTC cycle has seemingly disappeared from the current one.

BTC Price

At the time of writing, Bitcoin is trading at around $66,100, down more than 8% over the past week.

Looks like the price of the asset has overall moved sideways recently | Source: BTCUSD on TradingView

Featured image from Bart on Unsplash.com, CryptoQuant.com, chart from TradingView.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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