The crypto whales are accumulating Bitcoin

Some crypto whales are accumulating Bitcoin by taking advantage of its price decline. 

That’s what emerges from the comparison between BTC prices on Bitfinex and those on other crypto exchanges. 

The “prize” on Bitfinex

Starting from January 16th, BTC prices on Bitfinex have often been higher compared to those on other exchanges. 

Taking as reference the price of Bitcoin in US dollars on Coinbase, the largest US crypto exchange, it is discovered that the daily price peaks have also been $200 higher, starting from January 16 onwards.

According to the interpretations of some analysts, these $200 “premium” regarding the price of Bitcoin on Bitfinex could be due to whale purchases. 

Bitfinex is not widely used by small retail investors, but it is used by Tether and other crypto whales. In fact, Bitfinex is part of the same group as Tether, namely iFinex.

Instead, Coinbase is probably the US crypto exchange with the most retail users. In fact, while the daily trading volume on Coinbase is just under $3 billion, on Bitfinex it is less than $400 million, because the number of users on this exchange is much lower compared to the US exchange. 

However, starting from the weekend, there has been a small boom in trading volumes on Bitfinex, probably due to whale activity. On Coinbase, on the other hand, trading volumes have dropped significantly during the weekend. 

Whales accumulate the queen of crypto $BTC

It is possible to hypothesize that these two dynamics, namely the premium on Bitfinex and the increase in volumes during the weekend, suggest a new activity of whale accumulation. 

Already during the course of 2023, and in particular before the end-of-year mini-bullrun, rather clear signals of accumulation by whales had emerged. 

It should be emphasized that starting from May, and until early December, BTC deposited on exchanges continued to decline, suggesting quite clearly that selling pressure could have decreased significantly. 

If on one hand investors and retail speculators may have ignored such a dynamic, on the other hand whales must have interpreted it as a bullish signal, and in fact they had accumulated some Bitcoin.

With the end of the mini-bull run, at the beginning of 2024, it is possible that some whales have sold to monetize their gains, since before December the price of BTC in 2023 had never exceeded $40,000. 

The dynamics that have occurred since the weekend on Bitfinex suggest that another accumulation period may have started, now that prices have fallen below $40,000.

Actually, it is still too early to say for sure, but it is not at all possible to exclude that with Bitcoin below $40,000, some whales have already decided to start accumulating again, especially if they sold at over $43,000 to monetize their gains from 2023. 

The trend reversal

Yesterday, in fact, something happened that could also be interpreted as an important signal. 

Many expected a return to $40,000 as a result of the “sell the news” activity by those who had bought BTC in 2023 at much lower prices. Many of these also expected that, in case of failure to hold at $40,000, the price could have dropped to $38,000. 

However, below $38,000 the number of analysts predicting further significant declines decreases significantly. 

It is possible to imagine that some whales find it difficult to believe in a stable return of the BTC price below $38,000 at this moment. For this reason, they may have started buying, effectively creating enough buying pressure to prevent the price from falling just below that threshold. 

Furthermore, there is another dynamic connected to the movements of the Chinese stock exchanges. 

Taking into consideration the Hang Seng index of the Hong Kong stock exchange, it is discovered that until January 1st, the day of the launch of the new ETFs on the stock exchange, there was no correlation with the price of Bitcoin, but after the drop on January 12th, there seems to be a bit of correlation again. This correlation became evident starting from January 18th. 

In particular, on Monday the Hong Kong stock exchange lost a lot, and it was also the day when the price of Bitcoin fell below $40,000 for the first time in 2024. Yesterday, the Hong Kong stock exchange had a slight rebound, and the decline in the price of Bitcoin ended up stopping. 

Today the Hong Kong stock exchange is instead recovering quite well, to the point of returning to the levels of January 16th. Even Bitcoin is recovering a bit today. 

Although all this is not enough to determine the beginning of a trend change, it could still be a sign of a possible end to the decline of the past few days. 

If the above whales were right, we could expect a Bitcoin price that in these days may not significantly drop below $38,000.