Bitcoin Whale Indicator Flashes Signal Last Seen Before 480% Surge In Mid-2020
31 May 2024 - 5:15PM
NEWSBTC
CryptoQuant CEO Ki Young-Ju today pointed out significant
similarities in Bitcoin’s market behavior between the current state
and mid-2020, a period marked by stagnant prices but high on-chain
activity. Young-Ju’s insights were illustrated with two key charts
and shared via a post on X, drawing parallels that suggest a robust
undercurrent of large volume transactions, potentially outside the
public exchange networks. The first chart, representing data up
until 2020, shows Bitcoin’s price alongside the realized cap for
new whales – a metric that tracks the aggregate value at which the
newly acquired Bitcoin by large investors was last moved. It’s a
different form of market capitalization that assesses each UTXO at
the price it last changed hands, rather than its present market
price. This metric reflects the actual realized value of all the
coins in the network, rather than their current market value.
Related Reading: Eye On $91,500: Key Bitcoin Level Could Trigger
Massive Surge, Analyst Warns This value experienced a sharp
increase around mid-2020, precisely when Bitcoin’s price was caught
in boredom just like in recent months, consistently trading around
the $10,000 mark. According to Young-Ju, this period was
characterized by high on-chain activity which later analysis
suggested involved over-the-counter (OTC) transactions among
institutional players. In the second chart, extending to 2024, a
similar pattern emerges with even more pronounced growth in the
realized cap for new whales, despite Bitcoin’s price showing a
sideways movement for almost 100 days now. The chart indicates a
significant addition of about $1 billion daily into new whale
wallets, a term typically referring to addresses holding large
amounts of Bitcoin, often linked with institutional or highly
capitalized individual investors. What This Means For Bitcoin Price
Ki Young-Ju elaborated on these observations: “Same vibe on Bitcoin
as mid-2020. Back then, BTC hovered around $10k for 6 months with
high on-chain activity, later revealed as OTC deals. Now, despite
low price volatility, on-chain activity remains high, with $1B
added daily to new whale wallets, likely custody.” Related Reading:
Lost And Found: Hackers Successfully Access Decade-Old Bitcoin
Wallet, Retrieve $3 Million He further referenced a tweet from
September 2020 that corroborated his analysis, noting that the
“number of BTC transferred hits the year-high, and those TXs are
not from exchanges. Fund Flow Ratio of all exchanges hits the
year-low. Something’s happening. Possibly OTC deals.” This
comparison and the sustained high level of the realized cap for new
whales suggest an ongoing accumulation phase among large-scale
investors, reminiscent of the activity observed in mid-2020. Such
movements are generally not visible on traditional crypto exchanges
and indicate a strong institutional interest that could be a
precursor to significant market moves. Following Young-Ju’s tweet,
BTC price rallied by 480% from September 2020 till November 2021.
If a similar move is brewing for Bitcoin price remains to be seen,
but the continuous growth in Bitcoin holdings among new whales,
along with sustained price levels, points to a potential buildup of
pressure beneath the apparent calm of the market surface. As
observed in the past, such conditions may lead to substantial price
movements once the accumulated Bitcoin begins to impact the broader
market through either increased liquidity or renewed trading
interest. At press time, BTC traded at $68,271. Featured image
created with DALL·E, chart from TradingView.com
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