The Behavior of Whales: Preparations for Cryptocurrency Market Growth

The Behavior of Whales: Preparations for Cryptocurrency Market Growth

The cryptocurrency market is a dynamic and ever-changing space, influenced by various factors and players. One key group that significantly impacts the market is whales, individuals or entities holding substantial amounts of cryptocurrencies. In this article, we will delve into the insights provided by Ki Young Ju, the co-founder and CEO of CryptoQuant, regarding the behavior of whales and their preparations for market growth towards the end of 2023.

In a previous post made in October, Ki Young Ju highlighted the shift in behavior among Bitcoin whales. He noted that these whales were adopting a “risk-on mode,” indicating a bullish market sentiment. This sentiment was evident as BTC started flowing into derivative exchanges. However, in his recent post, Ju goes deeper into this behavior, revealing that whales have been actively opening long positions when Bitcoin was priced at around $29,000.

According to Ju’s observations, this accumulation phase by whales began in early August 2023. Interestingly, many whales initiated their entry into the market during a cyclical low for BTC, which coincided with the collapse of the FTX crypto exchange in November 2022. The increased cryptocurrency transfers to derivative trading platforms during that period further substantiate this claim.

October witnessed a surge in whale activity specifically in the United States. This surge was indicated by an uptick in markups on the Coinbase premium index and the rise in assets on the Chicago Mercantile Exchange (CME). Notably, during this period, retail investors had yet to enter the market. However, given the prevailing conditions, the supply of BTC may struggle to keep up with the growing demand from large institutional investors, signaling that whales are unlikely to dispose of their Bitcoin reserves.

Data provided by Ki Young Ju supports the notion that Bitcoin whales have played a crucial role in supporting the current price action since August. Within this timeframe, Bitcoin successfully reclaimed the higher price range around $20,000 and approached the critical resistance level at $30,000. The significance of this support is further underscored by Bitcoin reaching a yearly high on December 4-5, trading above $42,000, its highest level since April 2022. In just one month, Bitcoin’s price has surged by almost 19%, and since the beginning of 2023, it has seen an impressive increase of 2.3 times.

Analyst Keith Alan, citing additional data from Material Indicators, confirms the increasing buying pressure from whales. It is suggested that this behavior aims to attract liquidity to the market. Once liquidity, primarily from retail investors, enters the market, whales can then distribute their coins or dump them on retail investors to profit from their positions.

Understanding the behavior of whales is crucial for gaining insights into the cryptocurrency market. Ki Young Ju’s analysis reveals that whales have been actively preparing for market growth towards the end of 2023. With the increasing influx of institutional investors and the anticipation of approval for exchange-traded funds (ETFs) for direct investment in cryptocurrencies, the role of whales in shaping the market dynamics will continue to be significant. As the market evolves, it is essential to closely monitor the moves of these influential players to navigate the cryptocurrency space more effectively.

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