Bitcoin (BTC) price has been under heavy selling pressure from whales for the past two months, data from the chain shows.
However, five key indicators suggest that wholesalers will soon turn back into hodlers or even accumulators of Bitcoin, while institutional demand remains high. This is an explosive setup that could push Bitcoin to new all-time highs in the near future.
Whales stopped selling
The number of whales, which are Bitcoin addresses with an account balance of at least 1,000 Bitcoin, has declined more than 10% since Feb. 8, suggesting a large bitcoin sell-off.
While the price of Bitcoin posted two all-time highs during the two-month dumping period, the overall price surge has slowed significantly, with BTC experiencing strong resistance at around $ 60,000. However, since March 31st, major Bitcoin holders have stopped selling.
Number of addresses with an account balance of at least 1,000 BTC. Source: Glassnode
The realignment of the portfolio at the end of the quarter is a typical time for sell-offs. With Bitcoin seeing a 104% price increase since the beginning of this year, so was to be expected.
Grayscale, the largest digital asset manager, announced on April 6 that it has just rebalanced its large-cap digital fund at the expense of selling Bitcoin.
If rebalancing is the main driver, and considering that the number of addresses with at least 1,000 BTC is back to the level last seen in late 2020 – when the price began to rise – the whales could no longer be sold for the time being.
Long-term traders selling Bitcoin are slowing down
When Bitcoin broke its previous 2019 high in October 2020, one of the fastest and longest-lasting increases in Destroyed Coin Days (CDD) began.
The CDD on-chain metric expresses the “weight” that long-term hodlers sell for. It is calculated by taking the number of coins in a transaction and multiplying by the number of days that have passed since those coins were last spent. This means that the higher the CDD, the more volume is sold.
Since the beginning of the year, sales by long-term hodlers have not only slowed down drastically, but have almost returned to the level at which the sell-off was originally triggered in 2020.
Bitcoin coin days destroyed, 21-day moving average. Source: Glasssnode
This suggests that long-term hodlers are increasingly convinced of a higher Bitcoin price in the near future.
Miners have turned back into Bitcoin accumulators
Since Bitcoin miners’ source of income is newly mined BTC, they have to sell their mined BTC on a regular basis to pay for their operating costs such as electricity bills. However, some miners tend to speculate on the price.
By holding back the sale of Bitcoin, they become net accumulators. This is expressed in the metric of change in the miner’s net position, which shows the 30 day change in the offer held in miner’s addresses.
Change in the net position of the Bitcoin miner. Source: Glasssnode
The last time miners hesitated to sell their Bitcoin was on the verge of a big price spike almost three months ago. This positive change suggests that miners expect higher prices in the near future.
Institutional demand remains high
Despite significant sales pressure from the whales, institutional demand for Bitcoin has not slowed. The net transfer volume of Bitcoin to / from exchanges is deep in the red, almost at an all-time low, meaning that more Bitcoin is currently being withdrawn from exchanges than is being deposited.
This is a sign that these coins are being placed in a cold store. This is typical of institutions as they tend to make long-term investments and prefer more secure custody solutions rather than leaving them on an exchange.
Bitcoin net transfer volume to / from exchanges, 14-day moving average. Source: Glasssnode
There has been a historic supply crisis in Bitcoin balances since the pandemic. It has become even more material as the institutions have accumulated in larger quantities since November 2020.
This is evident from the sharp steady decline in Bitcoin balances on the exchanges in recent months, especially at Coinbase, which is a common choice for institutions.
Bitcoin balances on exchanges. Source: Glasssnode
In the meantime, Coinbase released its first quarter results and outlook yesterday, which states:
“$ 223 billion in assets on platform, representing an 11.3% market share in crypto assets, includes $ 122 billion in institutional assets on platform.” “
Not only is it certain that the institutions have increased their revenues significantly, but this data also shows Coinbase’s confidence that this buying trend is unlikely to end anytime soon.
Weekly ascending triangle near a break
A weekly ascending triangle has formed since the beginning of February. Statistically, this chart pattern gives a higher chance of breaking up than down.
Should the price break higher, the size of the triangle suggests a potential breakout target towards $ 79,000. While neither the uptrend nor the price target is a certainty, it is a chart worth checking out alongside key signals in the chain.
BTC / USD 1 week candle chart. Source: TradingView
Strong forces in the market – whether they are long-term hodlers, miners, or whales – all show signs of confidence in a rising Bitcoin price.
The ascending triangle gives even more reason to believe that this move may be imminent and directed upwards. While nobody would mind getting a bitcoin price of $ 79,000 in the near future, splitting the triangle is also an option to consider as not all of the major signals in the chain are fully aligned yet.
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