Both small and rich Bitcoin (BTC) traders accumulated the benchmark cryptocurrency en masse during the period when its prices rose from below $30,000 to over $40,000, signaling their confidence in the asset’s long-term bullish setup.
The basis of the upside outlook came from Ecoinometrics, a crypto-focused newsletter service. It highlighted in its latest edition a flurry of on-chain data that tracked the flow of Bitcoin into wallets that belonged to the richest crypto traders, known as “whales,” and to entities that held the cryptocurrency in smaller quantities — the so-called “small fish.”
See more: Bitcoin on-chain accumulation trends
“After a couple of weeks of data showing that most address buckets are accumulating coins, Bitcoin is finally bouncing back from the $30k level,” wrote Nick, the author of the Ecoinometrics newsletters, as he highlighted a heat map that witnessed Bitcoin flowing into the small fish and whales’ wallets.
The color red points to a situation, in which every group — whales or fish — has accumulated Bitcoin in the past 30 days. Conversely, the color blue corresponds to situations wherein only the smaller fish have accumulated the digital asset in the same timeframe.
Bitcoin’s heat map has returned to red.
“We can do the same plot for the current cycle and we observe pretty much the same thing,” noted Nick while pointing to the July 2020-July 2021 graph as follows.
Moby Dicks everywhere
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Data from other sources matched the Ecoinometrics’ analogy.
For instance, crypto-focused data tracking service WhaleMap reported Thursday that the number of unspent transaction outputs currently belonging to Bitcoin whale wallets has spiked, thereby suggesting their intentions to wait for higher prices.
“The last whale bubble in our range,” tweeted WhaleMap.
The fundamentals backing whales’ involvement in the current Bitcoin rally pointed to fears of persistently rising inflation despite United States Federal Reserve Chairman Jerome Powell’s attempts to sideline the issue in his recent press conference on Wednesday.
Powell admitted that inflation has surpassed the Fed’s projections for 2021 but blamed it on the unusual nature of the U.S.’ economic recovery. He noted that supply bottlenecks have created shortages that have led to “temporary” price increases.
The comments appeared as the Fed continues its expansionary policy of near-zero interest rates and $120 billion a month in bond purchases that, as the Wall Street Journal editorial noted, could have been stopped two months after its launch in March 2020.
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The journal cited the National Bureau of Economic Research’s report of last week, which noted that the U.S. recession officially ended in April 2020.
“The FED has a real challenge ahead balancing its response to a global pandemic with low rates and seemingly rising inflation,” Jeffery Wang, head of Americas at Amber Group, told Cointelegraph, calling it “an extremely difficult situation” for central banks running their quantitative easing programs.
Wang added that the backdrop of cheap money and rising inflation creates a bullish narrative for flight-to-safety assets such as equities, real estate and Bitcoin. He said:
Pankaj Balani, CEO of the crypto derivatives platform Delta Exchange, meanwhile, anticipates Bitcoin to continue its bull run toward $50,000, citing options activity that he said remains heavily skewed to the upside at least until mid-August.
Related: Bitcoin traders express mixed emotions about what’s next for BTC price
“There is call buying activity across maturities — weekly, bi-weekly and monthly,” Balani told Cointelegraph in an email statement.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of nftgamef.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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