Are you buying or selling?
Recent market data indicating concentrated bitcoin hoarding by large investors appears to be a misinterpretation of internal currency housekeeping.
On January 2, Julio Moreno, head of research at the analytical company CryptoQuant, reported that the signals on the chain were initially interpreted as “whale” purchases, mainly due to activity related to the exchange.
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Bitcoin Whales cut off when capital flows turned negative
He explained that the stock shown is mainly driven by the pooling of their assets through cryptocurrency exchanges.
Exchanges frequently organize their digital repositories by moving funds from multiple smaller deposit addresses into smaller and larger cold storage wallets.
These technical transfers can mimic the footprint of a large investor buying large amounts of Bitcoin. Thus, creating false positive signals for market regulators.
However, Moreno observed a bearish trend among owners of relatively large volumes after analyzing in-exchange transfers.
According to him, Bitcoin “whales” — entities holding more than 1,000 coins — and mid-level “dolphin” investors were net sellers in December.
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The total balance held by this group dropped from approximately 3.2 million bitcoins to 2.9 million in December, before a slight correction to 3.1 million.
Similarly, medium-sized wallets holding between 100 and 1,000 Bitcoin saw their collective holdings drop to 4.7 million BTC.
In particular, this distribution activity coincided with periods of volatility in asset prices. According to data from BeinCrypto, Bitcoin corrected sharply in December, falling from a high of $94,297 to a low of $84,581.
Meanwhile, Glassnode, a blockchain intelligence firm, confirms the sale of separate data. It shows monthly capital inflows that turned negative towards the Bitcoin network at the end of December.
This reverse It ended a two-year streak of positive earnings that began in late 2023.
At the same time, long-term holders, who typically embrace volatility, are now locking in losses at a faster rate than records set earlier in 2024.
This increase in actual losses indicates that the wave of “investor fatigue” is strong among the market assemblage.
