New Bitcoin Whales Hold 1.97M Coins, What It Means For BTC?

A recent accumulation phase in Bitcoin has seen 1.97 million coins transferred by Bitcoin whales. They transferred coins to newly created large-scale wallets, a surefire indication of a major shift in investor sentiment.

This accumulation phase comes after a peak in long-term holders, which points to a shift in the behavior of the market participants while BTC’s price remains near its all-time high.

Bitcoin Whales Emerge as Accumulation Heats Up 

Recent Bitcoin whales’ accumulation activity has added 1.97 million Bitcoin to newly created wallets, signaling increased interest and a shift in market sentiment towards BTC near its all-time highs.

That trend is not limited to older big investors, as new wallets have actively accumulated BTC in recent weeks. According to CryptoQuant CEO Ki Young Ju, the balance of BTC held in wallets less than 155 days old surged over 813% so far this year, with most of it happening within the past month. Ju pointed out in a thread on X that the new investors had wallets that were shifting the distribution of BTC holdings. This may change the future dynamics of price.

New whale wallets now hold 1.97M #Bitcoin.

Each has over 1K BTC, average coin age under 155 days, excluding exchange and miner wallets, likely custodial.

Their BTC balance surged 813% YTD, taking up 9.3% of the total supply, valued at $132B today. pic.twitter.com/pxq0tcqMuW

— Ki Young Ju (@ki_young_ju) October 16, 2024

The new Bitcoin wallets are not just the result of older wallet rollovers for security. Instead, this could indicate the long-awaited entrance of institutional investors into the cryptocurrency. These addresses have different forms and signatures, indicative of the buying of fresh BTC holdings. These metrics began building as Bitcoin was sideways trading between $50,000 and $64,000. After the accumulation phase, BTC broke through $68,000 and reached a dominance of 57.6%.

Aside from buying up existing BTC, Bitcoin whales have been absorbing nearly all the newly issued Bitcoin since May 2024, halving that reduced the daily supply to 450 coins. The miners began holding their BTC after a summer 2024 slowdown in big-time accumulation. With increased demand, the spot BTC has just become sparser. As Ki Young Ju noted, this has emerged again as a bullish signal in the market. Whales, however, are turning out to be wiser by the day: at least some of them are using the spot BTC trading for short-term gains, not just long-term holding.

However, it’s not just Bitcoin that has seen the increased whale activity. Just recently, a surge in whale activity, with large holders accumulating significant amounts of AAVE, has fueled speculation of a potential price rally.

ETF Buying Drives BTC Accumulation, Whale Wallets Surge

The spikes in Bitcoin accumulation have been heavily driven by exchange-traded fund buyers. They are reportedly poised to buy more than $1 billion of BTC in the third week of October alone. ETF buying has reached $920 million so far this week, per Arkham Intelligence. These newer Bitcoin whales  have pushed their Bitcoin wallet balance higher. They now own an additional 8.4% of the cryptocurrency’s supply in 2024.

While this trend mainly comprises ETF activity, it does not entirely account for the growth. Some accumulation likely belongs to institutions. Addresses holding over 1,000 BTC, such as whale wallets, have been trending up over time.

This increase in new big holdings has removed more coins from circulation. It added to the current more-than-16-billion-dollar long-term storage that includes over 2 million BTC held in miners’ reserves. Bitcoin whales typically accumulate more. This shows the market bottoming out and preparing for the next bull run.

In this cycle, big investors accumulated Bitcoin (BTC) even while the price remained close to its all-time high. Unlike past cycles, where buying of the huge quantities typically surged during deep corrections of over 70%, this time, investors continued adding to their holdings during smaller dips. The absence of a significant drawdown did not deter them, indicating a shift in accumulation behavior.

Some experts expect Bitcoin will rise. Just recently, Arthur Hayes, co-founder of BitMEX, said that the price of Bitcoin will jump high due to current geopolitical tensions and its impacts on the economy.

Investor Sentiment Shifts Bullish as Whales Accumulate Bitcoin

The Rainbow chart points to BTC’s current accumulation phase, which is in line with investor behavior and shows a “buying” trend. The crypto fear and greed index has flipped into “greed,” driven by heavy spot whale buying.

credit: blockchaincenter.net

This has also been reflected in the leveraged positions. BTC open interest recently breached above the $21 billion level that has not been seen since the end of July. This came after a severe drop post-August 5, one of the most significant drawdowns this year.

In the near term, the long and short positioning could affect price action in both directions. The Bitcoin whales in the spot are dictating sentiment. They also build momentum that provides excellent opportunities to shake out weaker hands.

This has resulted in a minor spike in transactions on-chain, while BTC is increasingly stored for long positions. At this high value, it does not want to be used for payments. Holders are looking toward ways of earning passive income from their coins while still retaining custody. This behavior in itself represents the long-term investment mentality and the scarcity factor driving the dynamics of the present market.

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