Since the start of the Russia-Ukraine war, approximately $3.8 million has been transferred or withdrawn into the BTC network by whale addresses. Is Bitcoin price optimism fading after the crypto market’s tough April? What are bitcoin and altcoin whales doing in the market and what do these moves mean?
Bitcoin and S&P 500 correlation continues
Bitcoin hit around 46,000 on April 4, causing a huge disappointment among crypto traders who have become too accustomed to the unrealistic returns of the market over the past two years after the March 2020 crash. exceeded $ and returned to $38,000. February and March showed signs of recovery, especially after the sharp declines in December and January. But the question is, why did the bullish momentum suddenly stop?
The correlation between crypto and equities, especially Bitcoin and the S&P 500, continues to exist and is expected to last until mid-May when Jerome Powell and the United States Federal Reserve announce a possible 0.5% rate hike to fight inflation.
Source: Santiment However, this does not mean that Bitcoin will decline further, according to analysts. Suppose cryptocurrencies continue to mimic stock price action and not vice versa. In this case, many feel that even though the S&P 500 has fallen recently, fears of a rate hike before the Fed’s scheduled meeting will likely have been digested.
Bitcoin liquidates whales, adds Tether whales
According to on-chain analytics firm Santiment, there are two crypto data platforms that continually go to the whale layer to analyze future price action of the entire market: Supply The supply is held at addresses with 100 to 10,000 BTC, and the supply is held at addresses with 100,000 to 10,000,000 Tethers (USDT).
Source: Santiment In the last two months, BTC whales from this key group have reduced 0.6% of their holdings. Meanwhile, the key USDT group actually added 1.8% of the largest stablecoin supply.
While large whale addresses have reduced the supply of BTC, evidence shows that prices often increase when there are more addresses holding 10 to 100,000 BTC. Since the start of the Russo-Ukrainian war in late February, addresses totaling about $3.8 million have been created or returned to the BTC network.
Source: Santiment “Traders are deceived by the bottom buying opportunity”
Santiment is often credible that the mainstream crowd is wrong when they believe a price event is too monotonous. found a trend. Even with the ‘buy at the bottom’ narrative fully sloping, the chart below shows that prices have not bounced back as traders had hoped. Ironically, for the most part, it’s only when prices start to recover that the audience abandons the trend of fixing the bottom.
Source: Santiment Ethereum whales started to show interest
Santiment’s Ethereum (ETH) whale transaction count metric, as we mentioned in the news on Kriptokoin.com , showing that it is starting to rise to the same rate above 1,400 per day seen last week, when the decline was quickly averted. High-value transactions exceeding $100,000 probably signal that the most important stakeholders are starting to circulate their cryptocurrencies at bull levels.
Source: Santiment Traders enter May short
FX funding rates are another price direction indicator. When there are extreme longs (bets in favor of rising prices), such as those seen just after November’s all-time high, prices tend to correct. However, according to analysts, the opposite trend seems to be taking place at the moment.
Significant short funding rates are evident across multiple exchanges, indicating that the FUD surrounding crypto markets is evident. In general, when Bitcoin and altcoins short together to this degree, prices are significantly more likely to rise to force liquidations against bets against rising crypto prices.
Analysts say it’s important to look for signs of capitulation as an indication that a price may finally bottom out. Currently, there is no overwhelming evidence of trader fear, but negative funding rates and a few other signals are certainly helpful signs. Analysts make the following assessment:
To some extent, a fundamental event such as the Fed’s rate hike may confuse the data for a while. However, at least the signs seem to point to the most bullish divergence not seen since a month ago.
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