The behavior of whales in the cryptocurrency market has become a topic of great interest, as they play a significant role in shaping market trends and sentiments. Ki Young Ju, the co-founder and CEO of CryptoQuant, has shared valuable insights into the preparations of these whale investors for the anticipated market growth towards the end of 2023. This article will examine Ju’s observations and analyze the implications for the cryptocurrency market.
In a previous post in October, Ju noted that Bitcoin whales were moving into a “risk-on mode,” indicating a bullish market sentiment. These whales, who hold significant amounts of cryptocurrency, were observed transferring BTC to derivative exchanges. In his recent post, Ju revealed that these whales have been actively opening long positions when Bitcoin was priced around $29,000. This accumulation phase started in early August 2023.
Ju further highlighted that many whales entered the market during a cyclical low for BTC, which coincided with the collapse of the FTX crypto exchange in November 2022. This is evident from the increased cryptocurrency transfers to derivative trading platforms during that period. The month of October witnessed a surge in whale activity in the United States, as indicated by markups on the Coinbase premium index and the rise in assets on the Chicago Mercantile Exchange (CME).
Ju pointed out that retail investors had not yet entered the market during this period, despite the increased whale activity. Given the prevailing market conditions, he suggested that the supply of BTC might struggle to keep up with the demand from large investors. Consequently, he believes that whales are unlikely to dispose of their Bitcoin reserves, signaling their confidence in the potential for future price appreciation.
Data provided by Ju demonstrated that Bitcoin whales have been instrumental in supporting the current price action since August. Bitcoin reclaimed the higher price range around $20,000 during that period and recently approached the critical resistance level at $30,000. On December 4-5, Bitcoin reached a yearly high of over $42,000, its highest level since April 2022. The price of Bitcoin has experienced a surge of nearly 19% in the past month and has increased 2.3 times since the beginning of 2023.
This bullish momentum is attributed to the expectation that the United States will soon approve exchange-traded funds (ETFs) for direct investment in cryptocurrencies by large institutional investors. This development is anticipated to attract significant liquidity to the market, further driving the price of Bitcoin and other cryptocurrencies.
Additionally, data from Material Indicators, highlighted by analyst Keith Alan, confirms the increasing buying pressure from whales. These strategic investments are aimed at attracting liquidity to the market. Once liquidity, primarily from retail investors, enters the market, whales can “distribute” their coins or “dump” on the retail investors to profit from their positions.
The preparations of whale investors in the cryptocurrency market, as observed by Ki Young Ju, suggest a positive market sentiment and anticipation of future growth. The entry of institutional investors and the increasing buying pressure from whales indicate the potential for further price appreciation. However, it remains to be seen how the dynamics between whales, retail investors, and market liquidity will unfold in the coming months.