On-chain Analysis of the crypto market
The positive price movements make many investors hopeful that Bitcoin may already have bottomed out. In this deep dive, we look at the on-chain fundamentals of the crypto market to better understand whether the recent price action is justified. In the analysis, we look at various metrics, with a particular focus on Bitcoin. For example, we analyze the behavior of whales, the bitcoin mining difficulty and we look at the halving. Bitcoin historically has a leading role in the crypto market, Bitcoin is often the first to climb out of a bear market and the rest of the market follows.
Whales buy Bitcoin in large amounts
The activity of large investors known as “whales” can have a significant impact on the crypto market due to their large holdings of at least 1,000 Bitcoin. Smaller whales are investors or users who have between 100 – 1000 Bitcoin on their wallets. In a previous article on our site, we mentioned that these larger and smaller whales collectively purchased approximately 37,100 BTC for a total value of approximately $1.7 billion.
This increase in demand from great whales could have a positive effect on the Bitcoin market, as it indicates that these investors believe in the future value of the cryptocurrency. Analysts believe this is also a sign of growing institutional money flowing into the Bitcoin market, which may contribute to further stabilization and growth in Bitcoin’s price.
Santiment’s graph in Figure 2 shows how much the number of small whales (100 – 1000 Bitcoin on their wallets) has increased significantly in recent weeks. In the last 8 weeks, 416 more wallets have been added that hold more than 100 – 1000 BTC. This equates to a 3.04% increase. With growing interest from institutional investors and recent big whale purchases, analysts are hoping the Bitcoin market rally will continue.