A Bitcoin Whale (BTC), an individual investor who owns a large amount of BTC, made a profit after two years. Whalemap data suggests that the whale purchased nearly 9,000 BTCs in the third quarter of 2018.
A pseudonymous trader known as “Byzantine General,” who shared the data, said:
“This whale is a legend. See that big bubble of about 6k in 2018? That’s almost 9k BTC that accumulated there. It finally took profit, after 2 years and 2 major surrender events.
Bitcoin’s price rally may have as key points the accumulation of whales and the $14,000 mark
The whale clung to the BTC for almost 22 months, through two important phases of capitulation. Bitcoin fell to a level of less than $4,000 twice, first in January 2019 and second in March 2020. The investor waited during both periods and finally sold at around $12,000.
What does a Bitcoin whale’s profit reserve suggest?
On August 16, Cointelegraph reported that there were large groups of whales in the range of $12,000 to $14,000. At the $12,000 level, many whales are profitable or at break-even, which arguably could give the whales an incentive to sell.
It’s not clear if it shows that whales are wary of Bitcoin reaching a local peak. The whales, because of the large size of their properties, follow the liquidity. If they feel there’s enough liquidity to sell, possibly as a result of increased retail activity, they’re likely to sell.
Therefore, the mass sale of a whale doesn’t necessarily show that Bitcoin has peaked. It could be argued that it increases the chances of consolidation in the short term. But until BTC falls below key support levels, it’s premature to suggest that a local ceiling has formed. Furthermore, it is difficult to estimate how much of the 9,000 BTC sold the whale.
The price of Bitcoin risks falling below USD 10,000 if this support level fails
One reason some whales seem to be making gains at current levels may be the relatively high spot volume of Bitcoin. According to another pseudonymous trader known as Bitcoin Rejoin, the market is still “awkwardly” driven by the spot market. He said:
“The market is still awkwardly driven by the spot market for now. The market remains relatively high in the chain of command. Therefore, price expansion is imminent again; the direction is not clear, but the low derivatives versus the spot market and the spot versus chain dominance indicate that we have not seen an irrational ceiling”.
When the market is heavily driven by the derivatives market, whales have less liquidity to seek and smaller reversals could cause large price movements.