February 23, 2024

Whales’ Accumulation Of Bitcoin Reaches 4-Month High

There has been a large accumulation of bitcoin holdings by whales. These buys have come amidst a bear market and economic uncertainty, piquing the interest of crypto enthusiasts. Some of this accumulation might have gone under the radar, but a bloodied crypto community is starting to notice.

Surging Bitcoin Trade Volumes

The bitcoin accumulation might have started as far back as June when the price first went below $20,000. Equally large sales might have masked massive buying activity by the whales. Most notably, Tesla sold 75% of its Bitcoin (a total of $936m– yet another promise broken by Elon Musk).

Whale accumulation activities are visible on all major exchange platforms. There has been a strong increase of over 2000% on all exchanges in the last six months. Most of that trade volume, unsurprisingly, comes from Binance.

The identity of the whales is yet unclear to observers—whether they are crypto gurus or institutions. The trade volume isn’t a migration of buyers from one exchange to Binance. The chart below shows that Coinbase’s market share hasn’t dropped much in the same period as Binance’s skyrocketing.

Several theories exist for the sudden surge in trading volume. Some analysts believe it could be whale(s) trying to buy all the sell-side liquidity. Further examination shows the renewal of the volume high for 2022 and little movement of the daily close price.

Another theory is that Binance allowing users to trade without fees could cause the increasing volume. Trading volume on Binance has increased dramatically since the promotion started. Binance cemented its position as the crypto exchange with an 84% trading volume, with Coinbase coming a distant second. 

Early suspicions were that some people exploited the fee-free trading policy for wash trading. Wash trading allowed the users to access benefits reserved for high-trading Binance users. Since Binance only applied fee-free trading on certain pairs, they excluded those pairs from the promotion.

Trade volumes should have dropped if the increase was solely down to wash trading. However, that has not been the case, with greater accumulation occurring. Binance has also extended the zero-trading fees to include popular ethereum pairs, and there has also been greater volume.

Time To Join The Whales?

Many have “bought the dip” only to see bitcoin prices hit new lows. However, the price seems to have found good support in the $19k zone. It remains to be seen whether the $20k support level will be breached soon.

CEO of Binance, Changpeng Zhao (CZ), has consistently maintained that he is “always bullish on crypto.” For now, the increased volume isn’t translating to higher trade prices.

Bitcoin trade volume hit a year-high of 593.261k on September 27th. However, this massive volume didn’t result in any significant move in market prices. Tellingly, Bitcoin price dropped on the same day– from $19,227 to $19,079 with a daily high of $20,385.

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