Bitcoin whales increase their holdings by 4.5%
Despite recent market conditions that saw Bitcoin's value fall below the critical $39,000 mark, large BTC holders, often referred to as “whales,” have demonstrated their confidence in the flagship cryptocurrency.
Crypto analyst Ali shed light on this development in a post on
Ali's analysis found that about 67 new companies have joined the elite group of Bitcoin holders holding more than 1,000 BTC, representing a 4.50% increase in these holdings in just two weeks.
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While some trembled in fear during the recent price correction, #Bitcoin whales accumulated more $BTC!
Around 67 new companies now hold 1,000 #BTC or more, up 4.50% in two weeks. pic.twitter.com/tje3fhznRR
— Ali (@ali_charts) January 30, 2024
This move by whales contradicts the prevailing market sentiment. Despite the price volatility and uncertainties that have gripped the broader crypto space, this suggests an optimistic outlook from these major players.
Bitcoin Resilience and Recovery: Factors at Play
In stark contrast to its recent price decline, Bitcoin has shown resilience and embarked on a recovery path. The cryptocurrency has seen over 10% increase in value over the past week, with a notable increase of 3.2% in the last 24 hours alone, bringing its trading price to around $43,412.
BTC price is moving sideways on the 2-hour chart. Source: BTC/USDT on TradingView.com
This bullish trend is reflected in the cryptocurrency's trading volume, which rose from under $15 billion to over $24 billion in a single day, indicating renewed investor interest and market confidence.
The resurgence in Bitcoin price can be attributed to several factors, with the waning effects of the Grayscale sell-off being a major contributor.
Bloomberg analyst James Seyffart recently highlighted a milestone event where BlackRock's Spot Bitcoin ETF (IBIT) nearly rivaled Grayscale's GBTC in terms of trading volume. This was a significant moment as it is the closest the spot Bitcoin ETF has come to challenging GBTC, which has long held the “liquidity crown” in the crypto spot ETF space.
The positive impact of this development on the Bitcoin price is obvious. Since IBIT volume consists primarily of inflows, it can potentially offset GBTC's outflow-dominated volume.
Reduced selling pressure and market optimism
Notably, Grayscale's conversion of GBTC into a spot Bitcoin ETF was a key factor in Bitcoin's decline below $39,000 last week, leading to a wave of sell-offs from GBTC investors.
However, recent trends suggest that GBTC investors' greed to take profits is waning. BitMEX Research noted in a post on
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Bitcoin ETF Flow – Day 12
GBTC data flow
Outflow of $192 million
— BitMEX Research (@BitMEXResearch) January 29, 2024
This bearish trend in outflows signals a decrease in selling pressure in the Bitcoin market and is contributing to the cryptocurrency's price recovery.
Adding to the positive sentiment, Glassnode co-founders Jan Happel and Yann Allemann, known on X as Negentropic, recently noted that Bitcoin's recent rise above $42,200 has created significant liquidity for long positions.
This situation suggests that Bitcoin is filling the liquidity gap above the $42,000 level, which could lead to volatility and market shifts. Negentropic notes that around $659 million in liquidations have already taken place.
If Bitcoin maintains its uptrend, it could trigger another $1 billion in short position liquidations, potentially leading to a “short squeeze.” This scenario, in which short sellers are forced to exit their positions due to a rapid price increase, could further increase the value of Bitcoin.
Featured image from Unsplash, chart from TradingView
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