Bitcoin is experiencing volatility. Are the big whales starting to sell?

Since the end of October this year, Bitcoin has been rising rapidly and even approached the $17,000 mark for a short period of time, setting a new high. However, as the price of Bitcoin on spot trading platforms continues to fluctuate and it is approaching the end of the year, many users believe that Bitcoin whales have awakened and may have made the decision to sell Bitcoin. However, according to the unused Bitcoin map on Whalemaps, the funds of the whale wallets that purchased Bitcoin at a price of $12,000 or more are still unused. In fact, institutions seem to be buying and HODLing at the same time.

The chart attached here highlights the inflows to whale wallet addresses (exchange and institutional wallets with balances greater than 10,000 BTC). It can be seen that the BTC purchase price in most wallets is between $12,000 and $16,000.

Source: Whalemaps

The bubbles on the chart represent the price at which unspent Bitcoin or accumulated Bitcoin is being cashed out. Although most Bitcoins are in profit, institutions are choosing to hold on rather than book unrealized profits. This could be a signal to retail investors and traders. Unless there is a big change in these data shown in the above chart, the price of Bitcoin on spot exchanges may not fall sharply.

According to CryptoQuant, as the price of Bitcoin continues to climb, the amount of money flowing into trading platforms has not increased significantly, which looks very much like institutional FOMO. Starting with MicroStrategy buying $500 million worth of Bitcoin directly from its balance sheet, this has become institutional FOMO. With institutions buying HODL, now may be the right time to profit from volatility on spot trading platforms. However, once institutions start selling Bitcoin, we may see the price of Bitcoin plummet until trading volume dries up.

However, it seems that the number of bitcoins in wallets on the trading platform has continued to decrease and has reached the level of October 2018. Many users still choose to hold their positions and wait and see.

With less than 55 days left in 2020, more factors could drive Bitcoin’s development as we head into 2021 — such as the launch of the digital yuan, possible approval of a Bitcoin ETF, or approval from regulators in top economies like the EU or the United States.

According to the latest report from blockchain analysis company Chainalysis, the rise and fall of Bitcoin in the previous week shows that macro factors have a strong impact. On November 9, after Pfizer released the good news of the COVID-19 vaccine, the price of the cryptocurrency fell from $15,800 to $15,000. This development shows that Bitcoin is a bet on uncertainty, and the more uncertainty there is in the market, the more users may choose to hold Bitcoin.

However, as vaccine news faded, pessimism spread, and the US election did not seem to be going very smoothly, uncertainty ensued, and Bitcoin broke through $16,000. The Chainalysis report continues to suggest that Bitcoin and other "safe haven assets" will fall back until specific news about a vaccine or economic stimulus package is announced.

"The subsequent move higher in prices suggests that financial markets will need to see more progress on the coronavirus issue before making a decision to move out of safe haven assets."

However, as mentioned in the Chainalysis report, "cryptocurrency prices may continue to rise. However, they will be affected by many factors, and investors should consider volatility rather than price appreciation." Rhythm also reminds investors that 2020 is a turbulent year for the economic market. The global economic environment has fluctuated greatly due to the impact of the epidemic, the US election and other factors. The crypto market will also be affected by the macro environment and cause token prices to fluctuate, so investors should operate with caution to avoid asset losses.