Bitcoin Whales Buy $553 Million Worth of BTC During Price Drop – Early Recovery in Play?

Insights:

• The price of Bitcoin (BTC) fell to a weekly low of $40,555 on Wednesday morning, down 9% from the yearly high of $44,700 recorded on December 8.
• The on-chain data trail shows that large institutional investors took advantage of the Bitcoin price drop to acquire an additional 13,010 BTC (~$533 million).
• Historical accumulation trends show that Bitcoin breaking the $43,200 resistance could lead to further gains.

The price of Bitcoin (BTC) fell to a 10-day low of $40,555 on Wednesday morning, down 9% from the 2023 high of $44,700 recorded on December 8. Analysis of on-chain data shows that large institutional investors took advantage of the Bitcoin price drop to acquire an additional 13,010 BTC (~$533 million).

Crypto whales bought 13,010 BTC during the price drop

Bitcoin price fell on Wednesday as markets reacted to the unwelcome inflation numbers from November's US CPI report. However, on-chain data trends show that large institutional investors remained unfazed.

According to the latest data from IntoTheBlock, the net flow of large BTC holders increased significantly this week as the price of Bitcoin fell.

BTC whales added a total of 13,010 BTC to their holdings between December 10th and 13th. As can be seen below, whales started buying just as BTC price began to decline on Monday.

Bitcoin (BTC) Major Holder Netflow vs. Price – Source: IntoTheBlock

With an average value of $41,000, Bitcoin whales have taken advantage of the recent price drop and increased their holdings by $533 million in the last three days. Such a buying spree among companies and wealthy investors often puts upward pressure on the price of a cryptocurrency for several reasons.

First, as observed, when crypto whales purchase large amounts of coins in a short period of time, they wipe out the excess market supply. It also provides much-needed liquidity, allowing panic sellers to execute trades at cheap prices

More importantly, it encourages other players in the ecosystem to develop positive momentum. All these factors are likely to shift BTC's momentum towards the bulls and trigger an early price rally in the coming days.

Prediction: Can BTC price reclaim $50,000?

Bitcoin price is likely to recapture the $50,000 mark in the short term. From an on-chain perspective, corporate investors accumulating BTC to fuel the upcoming spot ETF approval appears to be the main driver of the current bullish momentum.

Bitcoin bulls are expected to remain in control without significantly affecting the spot ETF approval process.

However, historical buy/sell trends show that the $43,500 area could form significant resistance to the next Bitcoin price increase.

The In/Out of the Money Around Price (IOMAP) data, which groups current Bitcoin holders according to their entry prices, also confirms this optimistic outlook.

This shows that 6.18 million current holders purchased 2.26 billion BTC at an average price of $43,245. If these holders try to take profits, the BTC price could decline again in the short term.

But if whales maintain their current buying trend, Bitcoin price is likely to break through this resistance and reclaim the $50,000 mark as predicted.

Bitcoin (BTC) Price Prediction | GIOM data | Source: IntoTheBlock

On the other hand, bears could invalidate this positive prediction if Bitcoin price breaks below the critical psychological resistance at $40,000. But in this case, the 1.17 million holders who purchased 520,140 BTC at the average price of $41,000 could provide significant support.

With Bitcoin Spot ETF approval expected in the next few months, BTC price is likely to vigorously defend this support level.

Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers