Bitcoin falls below $25,000 as whales show increased activity

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Bitcoin has fallen below the $25,000 level over the past 24 hours as on-chain data shows signs of increased whale activity.

The number of Bitcoin whale transactions has skyrocketed recently

According to data from the analysis company at the chain Sentiment, whale activity rose to its highest level in four months yesterday. The relevant indicator here is the “whale transaction count”, which measures the total number of transfers taking place on the Bitcoin blockchain that are worth at least $1 million in value.

When the value of this metric is high, it means that a large number of whale transactions are taking place on the network right now. Such a trend shows that these huge holders have an active interest in trading the cryptocurrency at present.

Since the scale of coins involved in whale transactions can be quite large, a significant number of them happening at once can cause noticeable ripples in the price of the asset. Due to this reason, high whale transaction values ​​can portend high volatility for the asset in the short term.

On the other hand, when the indicator has low values, it means that whales are not showing much activity at the moment, and thus they may not have too much interest in BTC. Naturally, this type of trend can precede a quieter market.

Now, here’s a chart showing the trend in the number of Bitcoin whale transactions in recent months:

The value of the metric seems to have been quite high in recent days | Source: Santiment on Twitter

As shown in the graph above, the number of Bitcoin whale transactions observed a large increase in value as the latest surge in the price of the cryptocurrency took shape.

The indicator’s value hit its highest value since November 2022, about four months ago, when the BTC price peaked around the $26,500 level, a 9-month high for the asset.

Since the number of whale transactions cannot distinguish between selling and buying transfers, elevated values ​​of the indicator are often not enough to say exactly what kind of behavior these investors are showing, only that they are currently active.

Although, some information may be inferred by looking at the accompanying price action. For example, during the price drop a week or so ago, the whales made a large number of transfers, after which the asset hit a local low and climbed out into a sharp increase, suggesting that the transactions may have been to have accumulated at the lowest prices .

However, in the current case, the asset’s value has declined since whale transactions have increased, with the price now below the $25,000 mark, suggesting that a decent portion of these transactions may have been made for selling purposes.

If this is the case, it would appear that these Bitcoin whales possibly saw the recent price rise as just a quick profit opportunity and not a push towards a long-term increase.

BTC price

At the time of writing, Bitcoin is trading around $24,700, up 12% in the past week.

Looks like the price of the asset has shot up over the past couple of days | Source: BTCUSD on TradingView

Featured image from iStock.com, charts from TradingView.com, Santiment.net