In the past two days, the trend of Bitcoin has made people a roller coaster, first breaking through 11,000 US dollars, and then falling to around 10,000 US dollars, and the currency of the DeFi section has fallen by more than 30%.
At the same time, we noticed whale activity and Bakkt's historical high volume, these data indicate that Bitcoin's momentum seems to be increasing.
According to Ki Young Ju of CryptoQuant, the amount of bitcoin sent by whales to exchanges has decreased. Historically, this data shows that the selling pressure from high-net-worth Bitcoin holders is small.
At the same time, Bakkt's institutional-centric Bitcoin futures market has hit a record high daily trading volume. Bakkt is operated by ICE, the parent company of the New York Stock Exchange (NYSE), to provide institutions with Bitcoin trading convenience.
Bitcoin whale activity and Bakkt's record trading volume indicate that both whales and institutions may be hoarding BTC.
Due to the large scale of transactions between whales and institutions, they have a huge impact on the price of Bitcoin. A whale that sold bitcoin for more than $12,000 after holding it for two years owns approximately 9,000 BTC. Based on the market price of US$11,070, it is close to US$100 million.
Considering that the risk of large sell orders is reduced, the decline in demand for whales to sell BTC is a positive factor. Ki said: "The exchange's whale ratio hit a new annual low. The fewer whales are transferred to the exchange, the less the sell-off, and the higher the price of BTC."
The data that CryptoQuant refers to is a large amount of Bitcoin reserves held by whales in the exchange. As Cointelegraph previously reported, some whales are sold at current prices. But the data shows that most whales are unwilling to sell for $11,000.
The whale's optimism coincided with the apparent increase in the demand for Bitcoin from institutions on Bakkt.
According to data from Arcane Research and Skew, Bakkt’s daily trading volume hit a record high on September 15, most of which were settled in kind. And just 24 hours ago, MicroStrategy bought another $175 million worth of BTC.
The timing of the surge in Bakkt's Bitcoin futures market is worth noting because it follows MicroStrategy's bulk purchases.
Based on these data, it can be concluded that some institutions may buy BTC after MicroStrategy’s high-profile investment, especially when some popular pricing models show that Bitcoin’s current valuation is low. An analyst from Arcane Research wrote:
"Another day, Bakkt hit a record high and showed an upward trend. After the trading volume hit a new high on Tuesday, yesterday this institution-centric Bitcoin futures platform had even higher trading volume."
Four days ago, Bakkt's trading volume set a record, whale trading activity on the exchange declined, and BTC rose from 10,800 US dollars to 11,100 US dollars.
What is the next goal in the short term?
According to Morecoin (www.morecoin.com), some traders said that based on the accumulation of institutional investors and whales, there may be a rebound after profit-taking.
In recent months, the decentralized finance (DeFi) market has performed better than mainstream cryptocurrencies such as BTC and Ethereum (ETH). With the strong performance of DeFi tokens, investors may circulate profits into BTC and stablecoins.
The anonymous trader "Light" said:
"I sold all ETH and altcoins last week and converted them into BTC and fiat currencies. Almost everyone has insufficient exposure to Bitcoin, and DeFi exposure is too large. When everyone is standing in the boat On one side."
If the trend continues, DeFi tokens may underperform BTC in the short term. At least for the foreseeable future, this may strengthen the growth trend of BTC, whose dominance index has fallen to an annual low in recent months.
The market has come to October. Before that, the main sections of the market were in the DeFi section. Bitcoin and many mainstream currencies did not perform as people thought. With the DeFi section temporarily coming to an end and funding rotation, mainstream currencies such as Bitcoin may have a good performance, let us wait and see.
Text/Cointelegraph Chinese, please indicate the source for reprinting.