With many Bitcoin bulls and hodlers feeling vindicated after the rally to above $19,000 this year, the CEO of blockchain analytics firm CryptoQuant says whale activities are decidedly bearish.
On a new episode of The Coinist Podcast, Ki Young Ju says a key whale ratio is above 95%, which indicates sideways or selling pressure will continue in the short term.
“The whale ratio is calculated by the top ten transactions from users on exchanges divided by the total inflows, and it indicates how many whales there are and how many Bitcoins are deposited from whales. When this value goes above 95%, it means 95% of deposits are from the top ten deposits, and the market is likely to be bearish or going sideways according to historical data.”
Ki Young Ju says that some of the bigger miners are likely influencing some selling pressure with the hopes of keeping the price at a level that discourages other miners from entering the industry.
“Even if I were an OG whale, I wouldn’t want to sell at this price and liquidate just yet, but it looks like some OG whales are trying to sell some Bitcoins. I would say that would be some miners who want to keep prices lower than $20,000. For example, miners have to keep Bitcoin price levels below $20,000 since they don’t want new competitors joining the mining industry. Or some whales, some market manipulators, they want more consolidation.
We can’t understand the purpose of those selling… On-chain data can’t tell us the inflows of institutional spot beats, but it tells us it’s a battle of OG whales versus retail investors.”
The quant analyst goes on to reveal the key things that he would want to see before going long on Bitcoin.
“I think when the whale ratio goes below 95%, and if there are no significant changes on exchange inflows and outflows, especially inflows, and when the whales start withdrawing from exchanges, that’s going to be a short-term bullish signal I would say…
I’m still short-term bearish or going sideways, but the thing that makes me worried is that on-chain data can’t see the spot beat inflows from institutional investors like MicroStrategy and others, so the buying pressure from those spot beats inflows and also sentiment from people… People are [FOMOing]. It’s really scaring me so I’m thinking of closing my shorts if the price is going sideways for about three days.”
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