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Bitcoin's 'whales' and 'fishes' take a break from accumulating as markets consider the likelihood of a 50 basis point rise in March.
Bitcoin's 'whales' and 'fishes' take a break from accumulating as markets consider the likelihood of a 50 basis point rise in March
According to the most recent data from CoinMetrics, an increase in Bitcoin (BTC) supply to whales' addresses seen throughout January looks to be halting in the middle as the price continues its intraday fall toward $42,000.
Whales and fishes are taking a break from Bitcoin trading.
As of Feb. 16, the total amount of Bitcoin held at addresses with a balance of at least 1,000 BTC was 8.10 million BTC, over 0.12 percent higher month-to-date. In comparison, at the start of this year, the balance was 7.91 million BTC, up 2.4 percent year-to-date.
After BTC closed over $40,000 in early February, the accumulation tendency among Bitcoin's wealthiest wallets began to slow down. Their supply varied between 8.09 and 8.10 million BTC, while Bitcoin fluctuated between $41,000 and $45,500, indicating that whale demand has dwindled inside the trading sector.
A similar view surfaced among addresses holding less than 1 BTC, often known as "fishes," indicating that they had stopped accumulating Bitcoin in February when the price fell towards the $41,000-45,500 region.
The Federal Reserve's aggressive tightening plans, according to Ecoinometrics' analyst Nick, have made Bitcoin whales and fishes "cautious," reiterating his statements from last week, in which he warned that "if Bitcoin has greatly benefited from quantitative easing, it can also be hurt by quantitative tightening."
There is no "dot plot" yet.
The minutes of the Federal Open Market Committee's January meeting were revealed on Wednesday, exposing a group of very concerned central bank governors who appear more willing to raise rates too much to manage inflation.
The minutes gave no indication of how fast or how far the rate rises would go.
According to Vasja Zupan, head of the Dubai-based Matrix exchange, the Fed fund futures market now estimates a 50 percent chance of a 50 basis point rate rise in March, down from 63 percent previously. However, there is no mention of a 0.5 percent interest rate hike in the minutes.
"Of course, the uncertain macroeconomic future has left Bitcoin's most powerful investors — the whales and long-term holders — in the dark," Zupan claimed, adding:
Hodling emotion is strong.
Willy Woo, a researcher, has a long-term positive prognosis for Bitcoin, noting that its recent price drops, including a 50% drop from $69,000, were due to futures market selling rather than on-chain investors.
"Investors would simply sell their BTC into cash under the old regime in a bearish period (see May 2021)," Woo stated in a note released Feb. 15, adding:
Investors' de-risking in the Bitcoin futures market corresponded with a sale of coins in the spot market in the May-July 2021 session, according to Glassnode, which was corroborated by a spike in net coin inflow to exchanges. However, as indicated in the chart below, this is not the case with the current price decrease.
"BTC is pouring out of reserves and into investor wallets at a pace of 42.9k BTC per month across all exchanges we watch," Glassnode noted, adding:
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