Network data shows that Bitcoin whale transactions have soared following the latest rally, a sign that profit-taking may have begun.
Bitcoin Whale Transaction Count Now Highest in Over 10 Weeks
According to data from on-chain analytics firm SanctionBitcoin whales have shown an increase in activity recently. The relevance indicator here is the “Whale transaction count”, which monitors the total amount of transfers occurring on the BTC blockchain that carry a value of at least $100,000.
When the value of this metric is high, it means that whales are making a large number of movements on the network at this time. Such a trend implies that these huge holders have an active interest in trading the coin.
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On the other hand, the low indicator suggests that whales may not be paying much attention to the cryptocurrency at the moment as they are not making many transactions.
Now, here is a chart showing the trend in Bitcoin whale transaction counts over the past few months:
As displayed in the chart above, the Bitcoin whale transaction count has seen a notable increase recently, suggesting that whales have made a large amount of transfers. More particularly, these gigantic entities carried out a total of 11,697 transfers in the 24-hour period at the peak of this spike.
Generally, it is difficult to say anything about what type of transfer activity exactly the whales are participating in based solely on the Whale Transaction Count, since both sell and buy transactions look the same from the indicator’s point of view. The accompanying price action, however, can provide some clues.
The metric’s latest peak is the highest the indicator has reached since the beginning of August. At that time, the spike coincided with a drop in the asset’s price, implying that many of the whales’ moves may have been selling.
The current surge in whale transaction counts occurred at a time when Bitcoin was recovering, so it is possible that whales are participating in profit-taking again. Since the spike occurred, BTC has dropped below $67,000, which may add evidence of this.
On the same chart, Santiment also attached data from another BTC metric: the Social Domain. This indicator basically tells us about the share of discussions on social media that Bitcoin is occupying compared to the total of the top 100 assets in the sector.
From the graph, it is evident that social dominance has increased to 25.5% for the cryptocurrency, which is the highest value since the end of July. Thus, Bitcoin’s mindshare is currently high when compared to that of altcoins.
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This is usually a sign of fear of missing out (FOMO) between traders. Historically, excessive hype has been a bad sign for BTC, with tops often following suit.
“Both signals are signs that the rally may be on hold due to profit-taking from key stakeholders and high FOMO from the crowd,” the analytics firm notes.
BTC Price
At the time of writing, Bitcoin is trading around $66,900, up more than 9% in the last week.
Featured image by Dall-E, Santiment.net, chart by TradingView.com