Whales are considered the smart money in the Bitcoin ecosystem because they have managed to survive almost every bear market cycle. Now analysts are looking at these wealthy investors again, because whales, who held their bitcoins for more than seven to ten years, are currently selling them again – for the first time since the collapse of Terra (LUNA) in the month of May. A cause for concern?
Bitcoin: Selling Whales – Here’s why
Aged Volume Bonds (SVAB) are a split of chain transfer volume based on the age of the tyre. Each band represents the percentage of the released volume that changed within the time period indicated in the legend.
The chart above shows the total volume of coin transfers that were last active between seven and ten years. The chart below, on the other hand, shows the same data for coins that have been flat for more than a decade.
Both charts start in October 2020 and show the sales items on a monthly basis. The impact of the Terra LUNA crisis can be seen on both charts – with a spike in volume released in May. The same spike can also be seen in September 2022 – especially for bitcoins, which last moved seven to ten years ago.
Bitcoin: Are The Lice Going Out?
Whales are considered the smart money in the Bitcoin ecosystem. The reason: They have managed to survive almost every bear market cycle. Furthermore, these incumbents have survived massive wars and FUD attacks.
September recorded the fifth and sixth highest transactions of the year for whales between seven and 10 years of age. Although whales older than 10 years did not record annual highs, the chart shows a significant increase in sales.
Because whales older than a decade understand market cycles better than any other cohort, their selling indicates a bearish outlook.
Cryptic whales are in decline
In addition to sales, the numbers also show a decline in the number of whales. People who have at least 1,000 bitcoins are called whales. Their numbers have decreased since the bull cycle peaked in January 2021. Although this was the peak, January was only the beginning of the bull market, however, most of the whales exited in January.
The decrease in the number of elections from January 2021 to July 2021 is understandable in light of the bull run in 2021. Between July 2021 and April 2022, there was a reasonable increase in the number of whales as the price of bitcoin between $60,000 and $40,000.
However, after April 2022, Bitcoin continued to fall. Even with falling prices, the number of whales fell from 2,150 to 1,695. The last part is particularly interesting because whales tend to stay out of winter prices.
There is a glimmer of light on the horizon
The drop in whales and the high volume of sales despite low prices indicate a bearish outlook. But there’s also a silver lining: The whales’ sales and cancellations indicate that their bitcoins have been spread across more than one person.
This means that Bitcoin is becoming more and more focused on fewer and fewer people. In the long run, a more distributed bitcoin benefits traders and increases the security of the network.