Bitcoin Whale wallets regain correlation with market value

Bitcoin has declined over the past few days as bears remained vigilant near $70,000. As a result, the major cryptocurrency has lost more than 4% over the past week and was trading near $66,000 at the time of writing.

Interestingly, wallets with 10 or more BTC have collectively reached their highest level of participation in two years. The data suggests that the absence of FTX influence may have allowed the market to more accurately reflect demand.

Whale Wallets Mirror Pre-FTX Collapse Levels

According to Santiment’s latest findings, this period has seen the price of bitcoin increase by approximately 226%. To put this into perspective, this group of wallets collectively held 16.16 million BTC, which is 84.8% of the supply on June 16, 2022.

Cutting back to June 16, 2024, wallets with more than 10 BTC currently hold 16.16 million BTC, representing 82% of the total bitcoin supply.

Santiment also highlighted the emergence of speculation that former FTX boss and convicted cryptocurrency mogul Sam Bankman-Fried was actively suppressing cryptocurrency prices in the second half of 2022. Since his collapse on November 2022, a clear correlation has emerged between the increase in the holdings of this portfolio. cohort and the global market value of BTC.

“But since the exchange’s collapse in November 2022, there has been an undeniable appearance of correlation between more than 10 BTC wallets and the coin’s overall market value.”

This could essentially mean that when FTX was operational, there could have been forces acting to decouple or distort the typical correlation between the buying/selling behavior of large holders and market prices. But in the post-FTX era, this correlation seems to have reasserted itself, with the holdings of the major Bitcoin whales more directly affecting and reflecting the broader market valuation.

As such, Santiment’s data suggests that FTX’s activities may have been an anomalous factor influencing cryptocurrency prices until its crash, after which whale wallets have once again become a stronger indicator of the trajectory of the market.

Stuck

The massive bitcoin sell-off was first revealed by Caroline Ellison, the former CEO of FTX’s sister hedge fund, at the dramatic FTX trial last year. She claimed that the disgraced founder of FTX had conspired with her to manipulate and keep the price of bitcoin below $20,000 using customer funds.

Ellison provided evidence in the form of a document that said, “Keep selling BTC if it goes above $20,000.”

The testimony led many experts to believe that bitcoin’s failure to reach $100,000 during the 2021 bull market was due to this artificial selling pressure created by FTX executives.

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