Bitcoin whale clusters show that "institutional FOMO" is driving Bitcoin's rise

Data shows that Bitcoin whales (addresses holding large amounts of Bitcoin) and institutions are still chasing the current rally, suggesting that the next bull run could be stronger than 2017’s.

Data shows that institutions have accumulated a large amount of Bitcoin between $12,000-15,000, and according to analysts at Whalemap, this is a positive trend because institutions and whales usually consider long-term investment strategies to accumulate assets.

As Cointelegraph previously reported, the capital giants are moving away from BTC while retail investors are moving away from it, which also explains the waning interest of retail investors in Bitcoin. . Although Bitcoin has experienced a parabolic rebound in recent months, various indicators including Google Trends show that retail demand for BTC is sluggish.

Institutional “FOMO” makes current BTC rally stronger than previous cycles

Whalemap analysts described the recent surge in whale demand for Bitcoin as “institutional FOMO.”

FOMO, short for “fear of missing out,” refers to a trend in which investors buy an asset because they are increasingly worried that it will continue to rise. Analysts say, referring to a chart showing whale groups and inflows into whale wallets:

“These are high-level investors, and this is what an institutional organization looks like.”

Bitcoin whales will cluster throughout 2020. Source: Whalemap

Whale herds occur when whale addresses (addresses holding more than 10,000 BTC) buy Bitcoin and do not move it for a long time.

This suggests that whales plan to keep their recently acquired BTC purchases in their personal wallets. Whalemap analysts said:

“The bubble indicates that whales bought the current price of BTC they are holding.”

Since October, two key trends have emerged in the cryptocurrency market, indicating that whales are accelerating their accumulation of large amounts of Bitcoin.

First, there has been a sharp decrease in short contract liquidations during the recent rally. During the previous whale surge, over $100 million worth of futures contracts were liquidated on major exchanges. This suggests that the rally was not a short squeeze, but an actual accumulation phase.

Secondly, the spot market has always been ahead of the derivatives market, and spot is dominating the market. When the BTC price rises, the funding rate of BTC transactions rarely exceeds the average of 0.01%.

Low funding rates suggest that the futures market is not majority-funded, suggesting that demand is coming from elsewhere.

This bull market will be more stable than 2017

In addition to the participation of whales and institutions, overall trading volume has increased significantly in the recent rally.

Data from on-chain market analysis firm Santiment also shows that the current Bitcoin trading volume is about $31 billion, much higher than the level on January 6, 2018. At that time, the BTC price was also hovering around $16,350. Santiment analysts found that the current trading volume is greater than the volume in 2017.

As Cointelegraph reported , Bitcoin’s near-term obstacle remains whether whales will sell at the $17,000 resistance level. Some analysts say that there is no clear resistance until the $18,500 to $20,000 range, which means that the arrival of all-time highs may be much faster than most people expect.

byJOSEPH YOUNG