- Bitcoin Whales Fall to New Two-Year Low
- Bitcoin also showed resistance at the $17,000 level
Bitcoin [BTC] managed to bounce above the $17,000 price range. While the current expectation was that it might continue to rally, whale activity suggested otherwise. According to a recent update from Glassnode, the number of Bitcoin whales is on the decline.
The previous 2-year low of 1,671 was observed on November 22, 2022
View metric: https://t.co/k1K8OK2tl3 pic.twitter.com/CPJxLaybbH
— glassnode alerts (@glassnodealerts) December 4, 2022
Read Bitcoins [BTC] price prediction 2023-2024
The Glassnode update revealed that the number of whales holding BTC fell to its lowest level in the past two years. According to the update, the number of whales was lower than it was on November 21. Moreover, the latter happens to be the date when Bitcoin fell to its current 12-month low.
Such a drop often indicated that the whales were selling out or the lack of strong demand from the whales. The observation above may also be consistent with the monthly decline in the number of addresses holding more than 1,000 BTC.
Despite the low interest observed from whales, the current price level of Bitcoin indicated a significant accumulation to support the slight rise. This was particularly compared to its current monthly low. It has notably shown some resilience above the $17,000 price level.
But why has the price increased despite less whale participation? A potential explanation could be that retail traders have been aggressively hoarding BTC. This may explain why the Money Flow Indicator (MFI) has been able to achieve a noticeable rise since the second week of November. This also explained why the upside could be small or relatively limited.
Assessing Current Bitcoin Retail Demand
A look at the sending and receiving addresses confirmed the above finding on the retail segment supporting the upside. According to the latest readings from Glassnode, the number of receiving addresses exceeded the sending addresses.
In other words, the buying pressure has exceeded the prevailing selling pressure. This explains why BTC managed to stay above $17,000 for the past few days.
Additionally, the lack of further decline may have been supported by the fact that foreign exchange balances did not increase. Instead, Bitcoin’s balance on exchanges was still at its monthly lows. This confirmed the absence of significant selling pressure to support further declines thanks to strong retail demand.
Bitcoin will likely continue to trend sideways if current market conditions prevail. A lack of whale participation could also mean that demand would remain limited. Moreover, it may not be particularly helpful for the upside in the short term. Especially if the retail accumulation runs out.
The current situation also suggested that there was a probability that a return of selling pressure could be observed. On the other hand, traders could see continued bullish momentum if whales regain interest in BTC.