Following a steady upward trend, Bitcoin [BTC] experienced a price dip and entered a phase of consolidation below $70,000. Interestingly, significant investors also appeared to have decreased their assets in 2024.
Is this indicative of a lack of faith in BTC among whales? Or were they simply cashing out to secure profits?
Is the Sale of Bitcoin by Whales Inevitable?
It is noteworthy that while the value of BTC dropped, it was still trading near its historical peak. Amid Bitcoin’s resilient performance, IntoTheBlock shared a tweet unveiling a notable development. The tweet disclosed that the count of addresses holding more than 1 Bitcoin had reduced from 1,024,437 at the beginning of the year to 1,013,120.
At first glance, this decline might imply dwindling confidence among whales regarding the primary cryptocurrency. However, the reality could paint a different picture. Whales might have opted to offload their holdings to reap profits, especially given the soaring price of BTC on the charts.
For verification, CryptoCrypto delved into the crypto’s on-chain data. Based on CryptoCrypto’s evaluation of Glassnode’s data, Bitcoin’s net position change remained negative in recent months. This could predominantly be attributed to the surge in BTC’s price during the same timeframe. Typically, as prices near all-time highs, investors frequently opt to sell their assets to capitalize on profits.
Subsequently, CryptoCrypto scrutinized Bitcoin’s social metrics to gauge any decline in confidence towards the coin. As per the analysis, BTC’s weighted sentiment oscillated between positive and negative territories frequently in the past week.
This oscillation indicated a lack of prevailing sentiment in the market, increasing the likelihood of whales selling off assets to secure profits.
Forecasting Bitcoin’s Trajectory
As top investors continued profit-taking and decreasing their positions, CryptoCrypto investigated the potential impact on Bitcoin’s price.
According to the analysis of CryptoQuant’s data, Bitcoin’s aSORP indicator displayed a red signal, suggesting an increasing number of investors selling at a profit. During a bull market phase, this could signal a possible market peak.
Furthermore, Coinglass’s liquidation heatmap projected a potential drop in BTC’s value to $68.6k in the event of a price decline. This prediction hinges on a steep rise in liquidations, which could serve as a support level from where bulls could launch a recovery.
Nevertheless, CryptoCrypto’s report highlighted a recent drop in BTC’s NVT ratio, hinting at a potential price surge in the coming days.