Below we will review an analysis showing a significant change in behavior between the bitcoin price in this ongoing 2021 cycle compared to the 2017 cycle, and how the whales dealt with it.
Accumulation and discharging:
In general it can be said that there is a different generation of whales / big players in the current cycle.
Also referred to as smart money, they follow different patterns of accumulating and unloading.
The process here consists of two stages:
Accumulation: when experienced stakeholders buy bitcoin at a low price (usually the low price due to fear, uncertainty, and “FUD” among newcomers)
Unloading: When experienced market makers sell back to new investors at an inflated price.
Looking at the behavior of these players in 2017, we can see that they replicated their accumulation and distribution patterns using 15 – 35% of the supply (total bitcoins circulating in the market at that time) in three waves, as shown in the following chart on the left:
2017 vs 2021: What’s the difference and why?
Interestingly and in contrast to the 2017 cycle, in the current uptrend of 2021, the same players (institutional investors most likely) are not handing out more than 5% of what they collected at a discount, as seen in the chart above to the right.
In fact, in 2021 institutional investors hold about 30% of the total supply in their possession despite the recent market crash, which began after the bitcoin price hit its highest level in mid-April 2021, at around $65,000.
As of this writing, the price of Bitcoin has lost about 50% of its all-time high value.
This dump is also shown in the range chart of the portfolios and the lifetime of Bitcoin in them, as can be seen from the following chart.
The chart above shows the scale in percentages of total coins held in a specific date range (displayed here between 1-3 months).
When there is a peak in the metrics of the chart, it means that these currencies have been converted (or spent) more than usual.
As can be seen from the above chart, the level of activity attributed to this type of bitcoin whale during the annual peaks (2021) has decreased significantly in the current cycle, compared to 2017.
One possible explanation for the difference above could be futures markets and the availability of stablecoins, which allow smart money to profit from a large sum of money, using a small portion of their bitcoins as collateral to maneuver the market.
Meaning that the higher bitcoin price in 2021 compared to 2017 made market control require less bitcoin.
In addition to the increase in the focus of interest in bitcoin currencies on the part of institutions entering the arena on a renewed basis, as if some institutions sell bitcoin, another institution appears and buys without compromising it, which makes it not sell a large part of its bitcoin holdings.
It remains just interpretations and interpretations accept the right and wrong.