Bitcoin Whales Are Pulling Back as Activity ‘Mirrors’ 2022 Bear Market: Analysts

The largest Bitcoin holders are parting ways with their holdings, with the balances of “whales”—or those holding between 1,000 and 10,000 BTC—declining over the last year, according to a report from crypto analytics firm CryptoQuant. 

The activity, coupled with decelerating accumulation by “dolphins,” or those with between 100-1,000 BTC, matches the pattern of the last major crypto bear market in 2022. 

“The 1-year change in whale balances remains in negative territory, a distribution pattern directly mirroring the 2022 bear market, when year-over-year whale growth first stalled then turned negative,” the report says. 

During that period, Bitcoin was priced as high as $47,450 in March to as low as $15,742 in November—a decline of nearly 67%. 

As it stands now, the top crypto asset has only fallen 42% from its October all-time high of $126,080. 

“On a monthly basis, both the dolphin and whale cohorts have effectively stalled,” wrote CryptoQuant. 

The firm added that when these groups of holders simultaneously fail to add Bitcoin, it typically precedes “ sustained price weakness, as they “represent the primary source of structural demand support in Bitcoin markets.” 

As dolphins and whales stagnate, the balance of BTC held by long-term holders has actually grown to 15.8 million BTC, a new all-time high according to the firm’s data. Yet, that data point is a counterintuitive signal, analysts said, labeling it “a bearish configuration signaling the absence of new market entrants.”

“Long-term holder supply increases when Bitcoin does not change hands at scale,” CryptoQuant wrote, calling the short-term demand “insufficient” to deal with the selling from long-term holders.

Bitcoin was recently changing hands around $73,536 on Thursday, down 1.7% in the last 24 hours and now nearly 5% on the week. 

Given its fall, traders have become increasingly bearish on its short-term price, with odds growing on Myriad—a prediction market platform operated by Decrypt’s parent company, Dastan—that BTC will trade below $70,000 before May concludes.