Recent market data indicates that there are whale investors actively buying Bitcoin, but this is actually a misunderstanding caused by internal asset management movements at exchanges.
On January 2, Julio Moreno, the research director at the analysis firm CryptoQuant, reported that many of the on-chain signals initially interpreted as 'whale' buying were actually asset transfers within the exchange.
Bitcoin whales reduce holdings and shift towards fund outflows
He explained that the apparent accumulation is primarily due to asset consolidation by cryptocurrency exchanges.
Exchanges often reorganize their storage systems by aggregating funds from multiple small deposit addresses into a few large cold wallets.
Such technical fund movements resemble the actions of large investors buying up Bitcoin in bulk, leading to misinterpretations by market watchers.
However, Mr. Moreno pointed out that excluding movements within exchanges, actual large holders are showing a downward trend.
According to him, 'whales' holding over 1,000 bitcoins and mid-range 'dolphin' investors were net sellers throughout December.
The balance held by this layer decreased from about 3.2 million bitcoins to just under 2.9 million in December, and then slightly rebounded to 3.1 million.
Similarly, mid-sized wallets holding between 100 and 1,000 bitcoins saw their total holdings decrease to 4.7 million.
Notably, these movements of dispersion coincided with periods of asset price volatility. According to BeInCrypto, Bitcoin dropped sharply from a high of $94,297 to a low of $84,581 in December.
On the other hand, separate data from the blockchain analytics firm Glassnode also supports the selling trend. By the end of December, the monthly net capital inflow into the Bitcoin network turned negative.
This reversal has brought an end to the period of approximately two years of consecutive net inflows that began at the end of 2023.
At the same time, long-term holders, who typically do not sell during downturns, are realizing losses at a pace that exceeds past records at the beginning of 2024.
The sharp increase in realized losses is a sign that 'investor fatigue' and panic selling are spreading among the layers considered to be the most resilient in the market.
