Bitcoin Whales Withdraw 100,000 BTC from Exchanges in Two Weeks

The Bitcoin market has seen a significant shift in the behavior of its largest holders, known as whales, in the past two weeks. According to Glassnode, a blockchain analytics firm, whale entities have withdrawn about 100,000 BTC from exchanges, indicating a strong preference for holding rather than selling.

Whale entities are defined as network clusters that control at least 1,000 BTC. Glassnode tracks the direct transfers from exchange wallets to these entities, which represent a reliable measure of their net position. The data shows that since Jan. 16, whale entities have consistently withdrawn more BTC from exchanges than they have deposited, resulting in a net outflow of 100,000 BTC in 14 days.

This trend coincides with a period of high volatility in the Bitcoin price, which reached a new all-time high of over $69,000 on Jan. 12, before plunging to below $50,000 on Jan. 16. The latter event was triggered by the liquidation of over $2 billion worth of leveraged positions on FTX, a popular crypto derivatives exchange. This was the largest one-day drawdown for Bitcoin since the FTX collapse in November 2022, which wiped out $8 billion in value.

Whales Withdrawals vs deposits | Source: Glassnode

However, the whale entities seem to have taken advantage of this dip to accumulate more BTC, rather than panic sell. This suggests that they have a bullish outlook on the future of Bitcoin, and are confident that the price will recover and surpass its previous highs. The data also shows that the number of whale entities has increased from 1,513 to 1,563 in the same timeframe, reversing the decline that occurred in 2022. This means that more network clusters have reached the threshold of 1,000 BTC, indicating a greater concentration of wealth and power in the Bitcoin network.

Number of entities with balance >1K | Source: Glassnode

The behavior of whale entities is often considered a leading indicator of the market sentiment, as they have more information, influence, and resources than smaller investors. Therefore, their withdrawal from exchanges could signal a lower selling pressure and a higher demand for Bitcoin in the coming weeks and months. This could also reduce the liquidity and supply of BTC on exchanges, creating a scarcity effect that could drive up the price.

However, it is important to note that the whale entities are not a homogeneous group, and their motives and strategies may vary. Some may be long-term holders, while others may be traders or institutions that use exchanges for custody or arbitrage. Therefore, their net position may not reflect the entire picture of the market, and may change quickly in response to new developments or opportunities. Moreover, the Bitcoin market is influenced by many other factors, such as regulation, innovation, adoption, competition, and sentiment, which may have a greater or lesser impact on the price than the whale activity.

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