During last week’s sell-off linked to Iran, large bitcoin holders, commonly referred to as whales, made significant purchases. Subsequently, they offloaded a considerable portion of those positions as prices surged back to $74,000. As prices dipped below $70,000, retail investors have been stepping in to buy, a trend that analysts suggest may indicate that the market correction is still ongoing. Approximately 43% of the bitcoin supply is currently at a loss, and with market sentiment reflecting “extreme fear,” analysts indicate that we are at a pivotal moment. The market could either break out above $74,000 or face a deeper test of support around $60,000, with whale activity suggesting the latter scenario. The savvy investors diving into bitcoin seized the opportunity during last week’s panic. Then it offloaded the rally to all other participants.
According to Santiment, whales holding between 10 and 10,000 bitcoin made significant accumulations from February 23 to March 3, during which bitcoin was trading between $62,900 and $69,600. The window encapsulated the most challenging moments of the Iran war sell-off and the initial phases of the recovery. As bitcoin surged to $74,000 on Thursday, those wallets began to realize profits, subsequently unloading approximately 66% of their recent purchases. Wallets with balances under 0.01 BTC have been consistently boosting their holdings as bitcoin dipped back below the $70,000 mark on Friday and into Saturday. That’s the classic pattern Santiment flagged as a warning sign. “When retail buys while whales sell, it typically signals that the correction is not yet over,” the firm stated in a weekend note. Data exacerbates the issue.
Around 43% of bitcoin’s total supply is currently at a loss, as each upward movement encounters sellers who have been in the red for weeks or months, eager to break even instead of capitalizing on the rally. At $74,000, the situation unfolded precisely as anticipated, with the bounce encountering significant resistance from a combination of whales cashing in and holders exiting at their cost basis. In the latest update, the Crypto Fear and Greed Index has dropped 6 points to 12 as of Saturday, indicating a strong sentiment of “extreme fear” within the market. That marks one of the lowest readings observed since the October crash. The overall landscape reveals a market that consistently generates remarkable intra-week fluctuations, yet these movements ultimately lead to stagnation on a monthly scale.
Bitcoin reached a milestone of $60,000 on February 6. On March 5, it reached a peak of $74,000. The price currently stands at $68,000, approximately the same level it occupied three weeks prior. The volatility is staggering, yet the overall movement hovers around zero. This scenario unfolds as every rally is met with selling pressure from holders eager to exit, while every dip attracts retail investors hoping for a rebound. The dynamic concludes in one of two manners. Either the selling exhausts itself, the underwater supply gets absorbed, and bitcoin breaks out above $74,000 with conviction. Or the buying exhausts itself, retail runs out of capital, and the $60,000 floor faces a genuine test. This week’s whale activity indicates that major holders are placing their bets on the latter option.