The Bitcoin Whale Comeback Narrative: A Closer Look at Onchain Data

Recent onchain data from CryptoQuant reveals that speculation about significant Bitcoin holders, known as "whales," aggressively reaccumulating their assets may be overstated. Many figures circulating on social media may be skewed by movements related to exchanges rather than genuine buying activity. This awareness is crucial as large transfers linked to exchanges could misrepresent actual market dynamics.

Key Takeaways

Onchain data indicates that claims of major Bitcoin reaccumulation by whales appear exaggerated.
Transfer activities linked to exchanges may inflate perceived whale holdings.
True balances of large holders are declining, contradicting the narrative of mass accumulation.
Long-term Bitcoin holders are now net buyers after their most significant selling period since 2019.
Bitcoin's current market behavior is marked by low trading volume, causing uncertain price movements.

Bitcoin

Understanding Whale Wallet Dynamics

It's important to recognize that exchange platforms often combine funds from numerous smaller accounts into fewer, larger wallets for operational efficiency or regulatory compliance. This consolidation can lead onchain trackers to misclassify these amassed funds as "whale" holdings, thereby inflating the perceived number of significant holders among Bitcoin investors.

Julio Moreno, the head of research at CryptoQuant, points out that once the influence of exchanges is removed from the analysis, the actual balance held by true large Bitcoin holders is decreasing. Specifically, the total balance in addresses containing between 100 to 1,000 BTC has diminished, which aligns with observed outflows from spot ETFs.

Data Visuals

Long-Term Holders Adjusting Strategies

Recent insights indicate a behavioral shift among long-term holders. Matthew Sigel, head of digital assets research at VanEck, has noted that these investors have been accumulating net positions over the last month after a substantial selling spree, which was the largest seen since 2019.

This change could potentially alleviate a significant source of downward selling pressure. Although it doesn't guarantee a price increase, it does suggest that at least one key group has stopped contributing to the selling dynamic. In financial markets, activities of buyers and sellers greatly influence price trajectories, making this adjustment by long-term holders noteworthy.

Currently, Bitcoin is trading around the $90,000 mark, specifically around $89,750 on Saturday, which represents a slight decline from its recent high of $90,250. The trading volume was approximately $52 billion, but overall activity has been sluggish. This lack of robust volume means that price movements are not sufficiently backed for a decisive breakout or breakdown.

The landscape of Bitcoin ownership has evolved following the introduction of US spot Bitcoin ETFs in early 2024. ETFs now account for a substantial share of both on-chain and off-chain demand, reshaping how Bitcoin is stored and monitored in onchain analytics. Observations indicate that ETF outflows have contributed to lower balances in the 100–1,000 BTC range, while some long-term holders are quietly increasing their holdings.

Overall, the evidence suggests a phase of consolidation rather than the onset of a new bull market or a significant downturn. Claims of a major reaccumulation by whales appear to be overstated due to the lack of consideration for exchange consolidation.

However, the situation is not entirely straightforward. Long-term holders are demonstrating buying interest, despite larger non-exchange wallets reducing their stakes. The future direction of Bitcoin prices will likely hinge on whether ETF flows rebound and if trading volumes increase enough to confirm any significant price movements.

Featured image from Unsplash, chart from TradingView