By
Mayowa Adebajo
December 5th, 2023
Blockchain analytics firm Lookonchain has recently identified a smart whale who purchased 6,070 BTC for $395 million amid the market slump.
Although the Bitcoin market may appear dull right now, investor interest is unwavering. The popular saying, “buy the dip,” still gives people confidence during such drops. This recent shopping marks the whale’s first Bitcoin purchase in 1.5 years, showcasing a keen sense for timing market opportunities.
Notably, this whale had cleverly acquired around 41,000 BTC during the 2022 bear market at an average price of $19,000 per BTC. Selling 37,000 BTC during the 2023 and 2024 bull markets at an average price of $46,000 per BTC, it netted over $1 billion in profit.
Over the past two weeks, Bitcoin (BTC price data) has been experiencing sideways movement with little volatility. This slump continues even after the excitement induced by the US Consumer Price Index (CPI) and Federal Open Market Committee (FOMC) decisions.
Despite the market’s existing stalemate, the average Bitcoin investor is still making money, with an unrealized profit of almost 120%, according to Glassnode. The demand side has managed to absorb sell-side pressure and HODLer divestment, maintaining stable prices and reduced volatility. However, this stability has also led to a sense of boredom, apathy, and indecision among investors.
Institutional traders have continued their cash-and-carry trade strategy, reinforcing expectations of range-bound trading. This lack of significant price movement has contributed to a general sense of market fatigue, leading to a 40% drop in BTC’s trading volume, currently standing at $19.4 billion. Meanwhile, the largest cryptocurrency is trading around $65,680, down by around 2.5% in the last seven days.
A Sell-off Condition
On the other hand, data from CryptoQuant indicates that during this period, a number of long-term Bitcoin holders and miners have sold their holdings, which has contributed to the market’s lack of upward momentum. Large Bitcoin holders have sold over $1.2 billion worth of BTC, likely through brokers. Additionally, the bitcoin spot exchange-traded funds (ETFs) experienced a $460 million outflow during the same period. Ki Young Ju, the CEO of CryptoQuant, observed the situation on social media platform X, stating:
“If this ~$1.6B in sell-side liquidity isn’t bought OTC, brokers may deposit BTC to exchanges, impacting the market.”
While several BTC holders are selling their holdings out of fear, the activity of strategic whales, such as the one identified by Lookonchain, demonstrates a continued belief in the long-term value of Bitcoin. Investors’ confidence is bolstered by these big shopping bags, which can also impact the broader market sentiment.
