Bitcoin (BTC) could still see a major price capitulation, but more whales need to start selling first, as the data suggests.
In one of its daily QuickTake market updates on May 27, the on-chain analytics platform CryptoQuant highlighted the increasingly bearish behavior of the whales.
Small whale sales should lead to ‘absolute capitulation’
Amid widespread consensus that the BTC/USD pair should make a lower low than its May 12 pivot price of $23,800, some of the biggest bitcoin holders are showing signs of impatience.
Looking at the unspent transaction outputs (UTXOs) of various whale wallet “gangs,” CryptoQuant contributor, Binh Dang pointed out that the sale of the upper cohort is increasing since April.
Entities with $1 million or more, known as “giant” whales, have increased their coin distribution, while smaller whales – those with less than $1 million – have been slower to change their position.
“After the drop at the end of January, we still saw the accumulation because all the major value bands went up, but From April 21 to now, the giant whales (range over $1 million) have been distributing and don’t get any signal to hoard now,” Dang explained.
“If the lesser whales and the retailers give up, I think we’ll see the outright capitulation and the bottom too. If not, I’ll be watching for positive moves in the 1m range to consider a reversal.”
An attached graph showed that the realized supply of giant whales was declining sharply, and that $100,000 to $1 million worth of whales were just beginning to follow suit.
On the contrary, the $10,000-$100,000 and $1,000-$10,000 bands showed no signs of capitulation.
“The giants continue to distribute. The minors and retailers maintain a defensive state,” added Julio Moreno.the lead on-chain analyst at CryptoQuant, in private comments to Cointelegraph.
For its part, data from on-chain analytics firm Glassnode confirmed an overall decline in the number of entities qualifying as whales.
Once again, an acceleration from April showed whale distribution, and as of May 27, overall whale numbers were at their lowest point since July 2020.
The focus is on the volume
In early May, whale buying levels formed key support targets below $27,000.
For the Whalemap on-chain monitoring resource, these were of interest after the initial drop on May 12.
In the later analysis, the researchers showed that capitular events of the type envisioned for the BTC/USD pair required the coins to move both in profit and loss by large amounts.
“On May 12, both profits and losses were higher than usual,” read part of a explanatory tweetnext to a graph of Moving Win/Loss (MPL) data.
“A good example of capitulation was in December 2018, when there was similar MPL activity (but on a much larger scale).”
This week, on-chain transaction volume saw a notable increaseCointelegraph reported.
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