Amidst Price Downturn, Bitcoin Whales Quietly Amass – Signs Point to a Potential Rebound on the Horizon?

The number of Bitcoin [BTC] addresses holding over 1,000 BTC has surged to a new all-time high, despite the coin’s performance post-ETF approval, according to data from IntoTheBlock.

At press time, the leading crypto asset exchanged hands at $41,760, data from CoinMarketCap showed. This marked a 15% dip from the $48,625 high it recorded a day after ETFs became tradeable.

With sentiment significantly bearish since then, many market participants have reduced their exposure to the asset by distributing some of their BTC holdings.

Smaller whales have a different plan
While BTC whales with over 1000 coins have intensified accumulation in the face of falling price action, investors that hold between 1 and 1000 coins have reduced their holdings in the past few days.

According to data from Santiment, this cohort of BTC investors began coin distribution on the 5th of January, probably due to a report published two days earlier by crypto investment services provider Matrixport.

In the report, the firm stated that it expected the U.S. Securities and Exchange Commission (SEC) to reject all applications before it for a spot BTC ETF.

This brought about a market frenzy, which led to a double-digit decline in BTC’s value and the liquidation of $500 million worth of positions across derivatives exchanges within 24 hours.

Bitcoin BTC 07.20.19 27 Jan 2024 Bitcoin BTC 07.20.19 27 Jan 2024

Source: Santiment

After the ETFs were approved, sentiments amongst these BTC holders did not improve. As of 26th January, 878,000 addresses held between 1 and 1000 coins, marking a 0.4% drop from the 882,000 addresses that held the same amount of coins when the year started.

Sentiment grows poorer
At press time, BTC’s weighted sentiment was -0.49. It has been negative since the 15th of January, and this has been evident in the downtrend in the coin’s price since then.

Confirming the poor sentiment in the BTC market, its futures open interest has also plummeted. According to data from Coinglass, it has fallen by 15% since the ETFs went live.

Screenshot 2024 01 27 at 07.21.18 Screenshot 2024 01 27 at 07.21.18

Source: Coinglass

For context, BTC’s futures open interest was $17 billion at press time. On the 10th of January when ETFs were approved, it was above $20 billion.

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