Uncertainty among short-term investors towards Bitcoin lately has increased, causing them to sell their holdings. However, while these short-term investors have been selling their BTC, long-term investors mostly recognized as whales continue to acquire the crypto asset in large volumes.
Impatient Investors Fuel Whale Accumulation Of Bitcoin
Recent research from CryptoQuant, a leading on-chain data analytics firm, reveals that large holders are optimistic about BTC as whales have been accumulating the asset from impatient investors, also known as weak hands, in light of market volatility.
Specifically, this increasing whale activity indicates a huge shift in Bitcoin ownership from novice traders to seasoned investors, which might pave the way for impending price explosions. The large holders seem to be deliberately taking advantage of drops in the price of Bitcoin in order to grow their positions, reflecting strong confidence in BTC’s future price performances.
In the CryptoQuant’s Quicktake post, the market expert with the username, Caueconomy highlighted that institutional wallets last week, which do not include crypto exchanges and miners acquired more than 67,000 BTC during a 30-day period, bringing their overall holdings to over 3.9 million.
According to the analyst, the order book continues to display this level of accumulation, with strong purchasing power on the largest crypto exchange in the US, Coinbase, and Hong Kong-based crypto exchange, Bitfinex. Meanwhile, the majority of trades on Binance, the world’s largest digital asset platform, and Dubai-based exchange, Bybit, remains short.
This disparity shows that small investors, due to sideways movement, have persistently cut down their positions, while large investors have been betting on BTC, steadily amassing the digital asset in huge volume.
Caueconomy noted that the retail selling force typically runs out of steam as a result of this kind of activity, which will then try to buy back Bitcoin at a higher rate as sentiment in the market improves. However, prior to this improvement in sentiment, institutional players have been strengthening their positions, prompting them to distribute in the upcoming price spikes.
BTC’s Open Interest Soars To New All-Time High
This rise in whale activity coincides with a significant increase in Bitcoin’s Open Interest (OI), indicating growing trading activity and a rise in interest from retail and institutional investors.
Market expert, EgyHash in another Quicktake post reported that the open interest of BTC has reached a whopping $19.8 billion, marking its highest level so far. He also highlighted that funding rates are at their highest optimistic level since August, which suggests that the majority of open interest is in support of long positions in BTC.
According to EgyHash, the growing trend of the derivatives market means that the interest in crypto assets is improving alongside the influx of liquidity. It also reflects an increase in bullish sentiment among traders and investors.
