There has been a significant shift in Bitcoin’s whale behavior recently, moving from a period of deposits to withdrawals from exchanges. This change began towards the end of August, following several months of continuous deposits.
This trend of deposits lasted longer than any other period since 2023, with the 30-day moving average indicating that whales have been removing more Bitcoin from exchanges than sending to them.
Furthermore, the current number is at the lower end of the recent trading range, indicating a shift in whale behavior. This decrease in whales adding supply to exchanges reduces potential sell-pressure during times of high price volatility.
To summarize, the trend of whales depositing coins on exchanges has diminished, leading to a healthier market structure. However, sustained withdrawals will be more impactful than short-term changes in flow.
Bitcoin holders profit from the market
It is crucial to note the profit generation by whales as they benefit from the recent market movements. As of now, Bitcoin is trading around $86,200, well above the cost bases of whales and sharks at $62,100 and $67,500 respectively.
On the other hand, shrimp wallets have been profitable since the lows of June, with a cost basis around $48,000. In contrast to 2022, Bitcoin’s price remained below the realized prices of all cohorts, leading to increased selling pressure and intensifying capitulation.
The price has now surpassed the break-even point for larger cohorts, easing the pressure on underwater positions. However, the recovery by major holders could lead to increased selling activity.
Although the market structure appears stronger than in 2022, profit-taking by whales may create resistance if exchange deposits rise again.
Moreover, the Net Unrealized Profit and Loss (NUPL) has shown a significant recovery, increasing by about 300% in three months from its low point. NUPL has remained positive since then, contrasting with the negative values seen in the previous bear market.
This recovery is reminiscent of early 2023 before entering a prolonged bullish phase, indicating lower seller conviction compared to 2022.
Despite the return to profitability, large holders may choose to realize gains, potentially creating resistance if exchange deposits increase. Ensuring the sustainability of NUPL will be crucial in determining the market’s conviction and avoiding distribution opportunities.
Key Takeaways
- Bitcoin’s on-chain structure strengthens as whales continue to withdraw and major holder cohorts remain profitable.
- The current market shows better holder profitability compared to 2022, but any resurgence in whale deposits could lead to selling pressure.
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