As the market sees long-term growth, whales are selling off their stocks to lock in profits and reduce their holdings. Typically, large periods of contraction coincide with price appreciation cycles. However, Bitcoin's performance in 2021-2023 has been a significant departure from the trend. During that time, it's traded at half its record high, and whales continue to get rid of their coins.
Over the past month, whales have been dumping Bitcoin at a record-high pace for 2023, adding an average of 16,300 BTC per day into the market. At the same time, the share of whales in the total inflow to exchange sites reached 41%. This exceeds even the stressful circumstances of last year, such as the collapse of the Terra project (when whales' share was 39%) and FTX's bankruptcy (33%).
Whales' actions may be driven by some insider information, but they're more likely driven by a reaction to the growing risks posed by the tightening of crypto regulation in the US and the prosecution of US market participants.
Notably, in July, 82% of all whale inflows to crypto exchanges have gone to Binance. Coinbase is in second place with a modest 6.8&. All other sites have taken in a combined 11.2%.
The whales' actions have resulted in Bitcoin not only failing to gain a foothold above $30,000 but also showing a decline in recent days.
It's worth mentioning separately that there is no unanimity within the whale cohort. For example, humpback whales (1,000 –10,000 BTC) were actively accumulating coins in July, while blue whales (>10,000 BTC) were getting rid of them.
Other market participants have taken a wait-and-see approach. Their aggregate exchanges don't show any significant change in their holdings.
StormGain Analytical Group
(platform for trading, exchanging and storing cryptocurrency)