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bitcoin btc whale selloff
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Whales Sell Down Bitcoin Rally: Why This Is Fundamentally Bullish For Crypto

Tony Spilotro by Tony Spilotro
2 years ago
in Bitcoin
0
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Bitcoin price is now below $18,000 and the distance from the all-time high set just weeks ago is increasing by the day. The incredible rally of 2020 might have now come to an end, with the tipping point caused by some of the largest cryptocurrency whales offloading their coins.

And while things are likely to turn bearish as a result in the short-term, the whale-driven selloff is ultimately bullish for Bitcoin in the long run. Here’s why.

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Has The 2020 Bitcoin Boom Begun To Bust?

2020 has been the year of Bitcoin and cryptocurrencies. DeFi and Ethereum helped to bring some positive momentum back to the space, and then Bitcoin took over from there.

Once momentum got going, thanks to a powerful bounce on Black Thursday from below $4,000, resistance at $10,000 was taken out with ease. Once the key level was retested and successfully defended by bulls, FOMO began to unfold in the crypto market.

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Major corporations like Square Inc. and MicroStrategy began disclosing their BTC holdings, just as PayPal announced support for the asset class. The two events coinciding triggered a seismic shift in market sentiment. At the same time, the digital gold narrative began to attract hedge funds who have been reallocating capital from the precious metal into crypto since.

But as new money comes in, the old whales who have long held BTC since 2017, the 2018 Bitcoin bottom, and potentially much longer before, are once again starting to sell. In fact, it was movement from some of the largest whales in Bitcoin that has turned the bullish trend bearish and sold down the recent rally.

bitcoin btc whales

Whales are selling as Bitcoin sets new highs | Source: BTCUSD on TradingView.com

Why Whales Selling Now Is Short-Term Bearish, Long-Term Bullish For Crypto

Whales get their name from their large capital size, which can potentially make a big splash and send waves crashing across the market. And that is exactly what took the steam out of the Q4 2020 Bitcoin rally.

According to data from Crypto Quant, 98% of the BTC moved recently was from the top ten whale wallets alone. Because of the size of these whales, it only took ten wallets to stop the bull trend in its tracks.

98% from the deposits are from the top 10 deposits. Right now, Whales are depositing heavily.

I'm expecting further downwards or choppy movement for the coming days.

cc: @cryptoquant_com pic.twitter.com/N8fGDhIFeD

— OneOfMany (@JA_Maartun) December 11, 2020

Whales selling and causing a shift in the trend could lead to extended downside until confidence rebuilds in the cryptocurrency and prices become more attractive once again. It is hard to imagine this as a bullish situation, but the largest whales selling BTC is a bullish blessing in disguise.

Bitcoin and cryptocurrencies were designed to be decentralized so that no party or actor could influence the network, but if the entities are large enough, they can absolutely influence the price. Satoshi also designed the tech to do away with wealth centralization, where the world’s wealthiest 1% are in command of more money than the remaining 99%.

RELATED READING | ALLIANZ CHIEF ECONOMIST WHO BOUGHT 2018 BOTTOM: I SOLD MY BITCOIN TODAY

Sadly, because of the way wealth works still, even Bitcoin – a fully decentralized network – doesn’t necessarily translate to decentralized wealth. The fact that just the top ten BTC wallets could have such a dramatic impact on pricing, means that the vision Satoshi had is still so far off.

However, because these whales are selling to eager buyers, and their holdings are diminishing, the centralized wealth in BTC is slowly becoming more widely distributed. If the BTC these whales are selling end up in the hands of institutions who are in it for the long haul, or holders who have yet to break after the rollercoaster ride they’ve been on, the selling pressure and impact of whales will eventually decrease.

Featured image from Deposit Photos, Charts from TradingView.com and CryptoQuant.com
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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