Crypto market regains confidence as Bitcoin whale activity soars

Bitcoin whales, major holders of the cryptocurrency, are increasingly accumulating more coins, signaling a renewed confidence in the bull market, according to recent blockchain data.

This resurgence in whale activity follows Bitcoin reaching its all-time high in March. After this peak, Bitcoin experienced a significant market correction. Despite the correction, market intelligence firm CryptoQuant has noted a strong buying force from whales, suggesting they find current prices favorable for purchasing and accumulating Bitcoin amidst the prevailing fear and market uncertainty.

Analysts have observed a notable rise in the 30-day percentage change in whale address holdings, along with an increase in the total BTC balance held by these large holders. Whales, defined as holders of Bitcoin addresses containing between 1,000 BTC and 10,000 BTC (excluding mining firms and crypto exchanges), typically increase their purchasing activity during bull markets and reduce it during bear markets.

Whales increased their BTC holdings by over 9.8% in March. Although their rate of accumulation slowed to 4.2% by May 1, coinciding with a Bitcoin price drop of over 20% to below $57,000, this metric rebounded to 5.5% as of May 22. CryptoQuant CEO Ki Young Ju highlighted that whales acquired 47,000 BTC during the sharp market dip in early May, reflecting their confidence in Bitcoin’s long-term potential.

The investment by whales in Bitcoin has grown significantly from $57 billion to $122 billion since the beginning of the year. This growth is observed through the “realized cap” metric, which evaluates the total value of all whale-held coins based on their purchase times rather than the current market value. Recently, Bitcoin’s price rose to $68,760, marking a 3% increase over the week, underscoring renewed market optimism.

James Check, chief analyst at Glassnode, emphasized that the Bitcoin network’s total realized cap has reached a record high of $578 billion, highlighting the robust fundamentals of the cryptocurrency. However, Check believes that the market is not yet in the true euphoria phase of the bull market, suggesting that the current sentiment lies somewhere between enthusiasm and excitement.

The increased whale activity coincides with a broader trend of growing institutional interest in cryptocurrencies. In 2023, nearly 40% of institutional investors had some exposure to crypto assets, up from 31% in 2021. A recent survey revealed that a third of respondents had at least 10% of their portfolio allocated to crypto assets, compared to only a fifth of respondents two years ago.

Markus Thielen, head of research at 10x Research, previously predicted that a breakthrough above $67,500 could potentially lead to new all-time highs. Currently, Bitcoin is trading at $68,700, just $5,000 away from reaching a new all-time high in U.S. dollars. Alongside 10x Research, other analysts have turned bullish on Bitcoin following a period of consolidation. Leading trading firm QCP Capital has expressed optimism about Bitcoin’s price momentum, forecasting a potential return to the highs of $74,000.

The renewed whale activity and increasing institutional interest indicate a robust belief in Bitcoin’s long-term value. This confidence, despite recent market volatility, suggests that significant holders see current conditions as an opportunity to strengthen their positions, reinforcing the positive sentiment surrounding Bitcoin and its potential for future growth.