The crypto market has been experiencing a lackluster performance, accompanied by a significant decline in whale activity across major crypto assets. Recent analysis by Santiment has highlighted a noticeable drop in $100k+ transactions for both Bitcoin and Ethereum, indicating a slowdown in large holder activity.
During the active period of March 13-19, Bitcoin saw 115.1k transactions valued at over $100k each. However, by 21-27 August, this number had almost halved to just 60.2k transactions, signaling a substantial decrease in whale activity. Ethereum showed a similar trend, with whale transactions dropping from 115.1k to only 31.8k over the same period. Other major assets like XRP, Toncoin, and Cardano also experienced similar trends.
While the reduction in high-value transactions may raise concerns, Santiment pointed out that a decline in whale activity does not necessarily indicate a bearish outlook. In fact, whale behavior often corresponds with periods of heightened market volatility, where large players adjust their assets to take advantage of rapid price fluctuations. The lower transaction volumes could instead suggest a phase of market consolidation or a temporary lull in volatility, rather than a precursor to a market downturn.
Despite the decreased overall activity, data indicates that top addresses are continuing to accumulate assets. This pattern suggests that whales may be strategically positioning themselves for future market movements. Instead of leaving the market, the quieter activity could reflect a more cautious and calculated approach, with whales accumulating assets in anticipation of potential price appreciation in the near term.
QCP Capital’s latest analysis shows that Bitcoin ended August down 8.6%, struggling to recover from the ‘BOJ crash’ earlier in the month and failing to surpass the 65k mark. Ethereum fared even worse, dropping by over 22% during the same period, with alleged selling by Jump Trading contributing to its decline. Looking ahead to September, historical trends suggest a bearish outlook, with six of the last seven Septembers closing in the red with an average return of approximately 4.5%, potentially causing BTC to fall to $55k if the trend continues.
Despite the recent market turbulence, the Singapore-based trading app remains optimistic, expecting Bitcoin to find strong support around $54k. This level previously triggered a rebound in July, leading Bitcoin to reach $70k. Additionally, this week’s economic data releases, including Unemployment Claims and Non-Farm Payroll reports, are unlikely to have a significant impact on crypto prices due to the diminishing influence of macro data on the market.
The decline in whale activity in the crypto market does not necessarily spell doom. It could be a strategic move by large holders to accumulate assets and position themselves for future market movements. While the market may face challenges ahead, there is still optimism for a potential recovery based on historical trends and strong support levels.