Whales Reduce the Bitcoin Trading Volume Despite the Crypto Market Rally

There was a tremendous decrease in the volume of Bitcoin traded among the Bitcoin whales recently. Moreover, the number of Bitcoin wallets that hold at least 1,000 BTCs has dropped to the lowest since August 2019. 

There are around 2025 Bitcoin whales, and these similar low-numbered whales were only available in August 2019. Based on Bitcoin’s current price, each whale holds BTC worth at least $23 million in their crypto wallet.

Why Did Bitcoin Volume Decline?

It is not the first time that the trading volume of the Bitcoin whales has reduced significantly. The investors who hold a large part of Bitcoin adjust their strategies based on the market conditions and their investing styles. The most probable possibilities might be reducing the risk exposure, regular profit booking, or diversifying their crypto assets.

In addition, institutional investments are on the rise, and institutions purchase the Bitcoin investments of whales. As a result, the share of Bitcoins held by whales declines, reducing the overall Bitcoin volume of whales. 

Moreover, unlike whales, who book regular profits during a fixed period, institutional investors have a more extended holding period. The longer the holding period means the absence of trades, resulting in low Bitcoin volume. 

The worst possible reason for the volume reduction is if the Bitcoin whales lose hope in BTC investing. However, considering the crypto market’s recovery and BTC’s massive rally, this scenario is less likely to happen. 

Why Do Bitcoin Whales Matter?  

According to the reports of Crytoslate, there are over 44 million Bitcoin addresses with non-zero BTC balances in 2023. In addition, the Bitcoin wallets with at least 1 BTC will reach 1 million very soon. However, most of these small Bitcoin wallets have a small individual role in controlling Bitcoin’s market volume. 

As per the Bitinfo charts, the number of Bitcoin whales’ wallets with over 1,000 BTCs is less than 0.04%. However, while comparing the value of Bitcoins, these small numbers of whales amount to almost 40% of overall available BTCs. At the time of writing, there are 1918 whales, with Bitcoin holding between 1,000 and 10,000. Moreover, the number of whales that have over 10,000 BTC is 113.

Do Bitcoin Whales Impact the Price of Bitcoins?

In the current scenario, the selling decisions of whales play a crucial role in controlling the volume and price of Bitcoin and the overall crypto market. Crypto analysts also monitor and analyze the activities of Bitcoin whales before placing any orders. If large whales sell a large portion of their Bitcoin holdings, there is a high possibility of Bitocin’s price drop. 

Moreover, the massive selling pressure can also create negative market sentiments in the crypto space. The crypto market is highly volatile based on the news and events. The information of enormous sell-offs from whales can have a substantial negative impact on the price.

Bitcoin’s Current Market Demand

Bitcoin trades around $23,500 with an average daily trading volume of $17,660,665,139. This trading volume has increased to over 12.2% compared to the previous day. The whale’s trading volume reduction hasn’t impacted Bitocoin’s trading volume. Moreover, the bullish sentiments in the market have added more retail BTC buyers. 

Among the $17.7 billion trading volume, almost $17.6 billion of Bitcoins gets traded on centralized exchanges such as Binance, Coinbase Exchange, KuCoin, and Kraken. BTC/USDT and BTC/BUSD are the trading pairs that constitute most of the BTC trading volume. These two BTC pairs contribute almost $6.8 billion in Bitcoins traded at Binance. In addition, Bitcoin’s market cap is $452,474,929,975, with a total supply of 19,303,031 BTC. 

Now, let’s check some technical analysis of BTC to understand the current market demand:

Bitcoin traded around $48,000 in March 2022, and the price fell below $16,000 in November 2022. This fall resulted in the loss of almost 67% of Bitcoin’s value. This negative market sentiment continued till 10th January 2023.  

The price of Bitcoin started to rally from $16,615 on 1st January 2023 to $23,127 on 31st January 2023. This rally led to an almost 40% rise in the price of Bitcoin. In addition, BTC crossed the $25,000 price mark on 16th February 2023. 

As per the technical analysis, Bitcoin looks bullish and less likely impacted by the Whales’ low trading volume. 

Closing Thoughts

Bitcoin Whales can play a crucial role in controlling the price of BTC. Moreover, they can also influence the crypto market sentiments based on their massive buying and selling activities. 

The trading activities of Bitcoin whales are closely observed among crypto community members. The recent reduction in BTC trading volume by whales has not yet developed any negative impact on the crypto markets. Moreover, the price of Bitcoin is rallying from the low it created in 2022.

Considering all these factors, we can assume that the whales are reducing the Bitcoin trading volume to diversify their crypto investments.