Bitcoin Whales Become Less: Why Is This Good News For Bitcoin?
Recently, analysts have been trying to find an explanation of why Bitcoin fell into the price trap and how soon it can get out of there. The news that the whales are floating away from the “fishing place” and leaving the crypto market is estimated by analysts ambiguously. Will this lead to a bullish or bearish Bitcoin movement?
Whales in the crypto market
For the past two months, traders have focused on Bitcoin in anticipation of the bull rally that has been talked about so much in the crypto space before the third halving in May 2020. But still, the flagship cryptocurrency misleads many analysts: small price movements up or down cannot make it clear in which trend Bitcoin will move further.
Technical indicators of the market behavior of Bitcoin also can not completely clarify the question of how the price of the flagship cryptocurrency will develop further. Some analysts predict a large-scale rally, while others make statements about the failure of Bitcoin. But, if we move away from the usual market indicators, there is one circumstance that can play in favor of Bitcoin: according to the latest Glassnode data, the number of whales has decreased.
As we know, whales are the largest players in the cryptocurrency market. As a rule, the group of whales includes owners of crypto addresses with a total of 10,000 Bitcoins or higher. Often these are people from the first crypto enthusiasts who, at the beginning of the launch of Bitcoin, believed in digital currency, and this turned out to be the right decision. Other whales are large investors who were able to profitably play on the fluctuation of the Bitcoin exchange rate.
How can whale reduction affect Bitcoin?
According to Glassnode, the number of whales fell from 120 to 103 in 2020. It is a fairly large figure, based on the total number of existing whales. It means that out of 17 crypto addresses, about 170,000 Bitcoins transferred. There is an assumption that this amount of Bitcoins could be transferred to other crypto addresses. But there is another side to the coin: 170,000 Bitcoins could be sold. It means that some of the whales ceased to exist.
A reduction in the number of whales can signal two main aspects that in the long run may affect the future of Bitcoin. Firstly, a decrease in the number of whales suggests that it will be more difficult for large crypto players to influence the price of Bitcoin in their favor. On the other hand, the reduction in whales suggests that investors are losing interest in Bitcoin and want to redistribute their capital.