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    Home » Crypto News » Bullish? On-Exchange Bitcoin Declines While Whales Accumulate (Report)

    Bullish? On-Exchange Bitcoin Declines While Whales Accumulate (Report)

    Author: Jordan Lyanchev

    Last Updated Sep 26, 2020 @ 12:16

    BTC stored on exchanges continually decreasing, while whales continue to accumulate, especially after the COVID-19 outbreak. A research company concluded that this is bullish for BTC’s price.

    A recent report suggests that the amount of Bitcoin stored on exchanges is declining while BTC whales increase their holdings and that’s bullish for Bitcoin’s price.

    The paper also highlighted that investors have a much larger time horizon for their holdings now compared to previous years.

    Bitcoin Stored On Exchanges Drop

    In its latest report shared with CryptoPotato on Bitcoin investors’ behavior, the popular research company Digital Delphi explored the number of bitcoins stored on cryptocurrency exchanges. The document indicated that if the BTC stock on platforms increases, it could put sell pressure.

    However, this isn’t necessarily the case during bull runs, as retail investors often “leave BTC on exchanges and traders use BTC as margin collateral.” Alternatively, in case the asset price rises while the stock on exchange decreases, this typically implies an accumulation trend.

    The report indicated that Bitcoin stored on exchanges marked an all-time high of 2.96 million in mid-February. Since then, the trend has reversed, and the number has dropped to below 2.6 million.

    Bitcoin Price/Bitcoin Stock On Exchanges. Source: DigitalDelphi
    Bitcoin Price/Bitcoin Stock On Exchanges. Source: DigitalDelphi

    Digital Delphi argued that the reason behind this decrease of BTC on exchanges is because investors are most likely preparing for a longer-term holding period. More importantly, though, the paper highlighted a substantial decline in speculative trading interest in Bitcoin, while the HODLing mentality has increased.

    “Unlike the 2019 price uptrend, which coincided with BTC stock increasing, this current trend has seen a divergence between BTC stock and price. This suggests a more sustainable move upwards for BTC, in comparison to that of 2019, as data indicates a holder base with longer time horizons.”

    Bitcoin Whales Haven’t Slowed Down Accumulating

    Digital Delphi’s data reaffirmed previous reports that Bitcoin whales, meaning addresses containing between 1,000 and 10,000 BTC, continue to accumulate large portions. The company outlined that whales have been on a shopping spree since the start of 2020, as their holdings have increased by 9% YTD.

    Moreover, the US Federal Reserve’s actions to print extensive amounts of dollars since the start of the COVID-19 pandemic have accelerated whales’ accumulations.

    “Since the USD M2 supply expansion in March, there has been a 7% increase in whale holdings.”

    According to the document, this only emphasizes the narrative that Bitcoin serves as a hedge against dollar inflation, and “the smart money is clearly betting on this.” It’s worth noting that prominent US investor Paul Tudor Jones III purchased BTC earlier this year to protect himself against precisely the rising inflation.

    Bitcoin Whales HODLing. Source: DigitalDelphi
    Bitcoin Whales HODLing. Source: DigitalDelphi
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    Read more on: Bitcoin Bitcoin Whales HODL

    About The Author

    Jordan Lyanchev View more posts by this author

    Jordan got into crypto in 2016 by trading and investing. He began writing about blockchain technology in 2017. He has managed numerous crypto-related projects and is passionate about all things blockchain. Contact Jordan: LinkedIn

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