Did Top Three Bitcoin Addresses Just Call Another Local Bottom?
The buying pattern of bitcoin whales has long been an indicator for coming market movement. While it may not happen everything, the fact remains that these top addresses control enough of the supply between them to have significant impacts on the price. This is evident in past movements coinciding with major price shifts and once again, these whales have gone on another accumulation trend that could be the start of another bull rally.
Bitcoin Addresses With 100K Accumulated
The bitcoin addresses that hold more than 100K on their balances are followed by investors and their activities are closely monitored. Usually, depending on if these wallets are buying or selling, the amounts can be large enough to move the needle more than a few inches. This time around, the wallets have been accumulating and their collective balances have reached a critical point.
Related Reading | Bitcoin Dominance Drops To 42% As Price Declines Below $43,000
On-chain analysis firm Santiment recently reported that three bitcoin wallets holding more than 100K BTC have been increasing their holdings for the past year. These wallets which had a collective balance of 260K coins by February last year have more than doubled their holdings. In the space of a year, they have added a collective total of 404K BTC, bringing their balance to 664K.
#Bitcoin’s top addresses with 100k+ coins currently hold 664k $BTC after sitting at just 260k $BTC in Feb, 2021. There are currently 3 addresses of at least this size. They held an #AllTimeHigh of 693k $BTC in late June, just prior to prices surging. https://t.co/VRMD1itWCL pic.twitter.com/V9bqIOrB6j
— Santiment (@santimentfeed) February 16, 2022
This is not a new record but is close to the previous all-time high balances of these three wallets. In June last year, the three wallets hit an all-time high of 693K on their balances, still unbroken to date.
Why Is This Important?
Well, one thing about these three wallets is the kind of pull they have in the market. The last time the wallets accumulated this much bitcoin was at the bottom of the downtrend in mid-2021. At the tie that these whale wallets hit their all-time high bitcoin holdings, the digital asset marked a local bottom. This was promptly followed by a tremendous bull rally that sent bitcoin and other cryptocurrencies towards new all-time highs.
BTC loses footing at $40K | Source: BTCUSD on TradingView.com
Now, the wallets have accumulated close to the same position once again. With less than 30K BTC left to reach its previous high, bitcoin looks to be marking another local bottom. If this is the case, then bitcoin could be gearing up for another rally towards a new all-time high.
Related Reading | Monero (XMR) Price Slides As Canada Includes Crypto In Emergencies Act
While this may be quite bullish for the digital asset, other indicators point towards more bearish tendencies. Bitcoin is only trading above its 20-day SMA and even that is barely holding. It shows that fewer investors are willing to purchase the asset for prices they have in recent weeks causing a decline in value. If this continues, then bitcoin could very well be struggling to hold its next support level at $39,190 in no time.
Featured image from MARCA, chart from TradingView.com