Since Bitcoin (BTC) began to falter in recent weeks, with the asset free-falling below $6,000, investors have whipped out their magnifying glasses, doing their utmost to discern what catalyzed the sell-off. Although many pointed fingers at the contentious Bitcoin Cash debacle, the U.S. Securities and Exchange Commission’s renewed crackdown on tokens deemed digital securities, and the lack of development in the Bitcoin ETF launch cycle, a novel theorized catalyst recently arose.
For those who aren’t in the loop, this proposed catalyst is that whales and former “HODLers” have sought to liquidate their cryptocurrency holdings, putting immense selling pressure on assets, such as Ethereum (ETH) and BTC. However, extensive research completed by Diar, a leading crypto-centric data analytics unit, notes that contrary to this popular belief, reports of a whale sell-off couldn’t be further from the truth.
Ethereum Whale Holdings Nearly Double In Bear Market
According to Diar’s most recent installment of its weekly analytics report, whales in the Ethereum waters have continued to accumulate, likely enticed by the bargain deals seen in the cryptocurrency market.
We have published our latest issue for your read:
• $ETH Whales Accumulate Billions, But Growth Remains Stagnant
• @coinbase Nears Full @circleinvest with $ZEC Exchange Listing
• @GrayscaleInvest Bitcoin Holdings Continue Rise as Prices Slide
— Diar (@DiarNewsletter) December 3, 2018
According to TokenAnalyst-sourced data routed through Diar, since January 2018, the amount of ETH that Ethereum’s top 500 wallets have held has risen by 80%. To put this growth figure into perspective, on January 1st, whales kept 11 million Ether under lock and key, as of November 30th, the same group of users holds 20 million.
This jaw-dropping sum amounts to nearly 20% of all Ether currently circulating, and $2.2 billion in U.S. dollar values, clearly indicating that whales are heavily betting on a market reversal.
Diar also noted that whales have presumably been bolstering their Ethereum wallets also due to a resurgence in SEC-backed regulatory action, coupled with a change in sentiment regarding ICO-funded projects. In a testament to the aforementioned point, the American governmental agency recently penalized AirFox and Paragon, while also fining the founder of EtherDelta for heading an unlicensed securities platform. These two regulatory actions alone instilled fear in the hearts of “altcoiners,” catalyzing the death of a multitude of small-caps as traders rushed to sell their tokens for ETH.
Regardless of the exact stimulus behind this bout of accumulation, Diar closed off its report by noting that while the fiat value of whales’ holdings has fallen by ~90%, Q4’s ETH balance growth is up 270% over Q3, a bullish sign in the eyes of optimists.
Bitcoin Accumulation Also Occurring, UTXO On The Rise
Not only have whales been accumulating Ether en-masse, but BTC as well, highlighting a trend of accumulation in 2018’s bear market. As reported by NewsBTC previously, crypto analyst FlibFlib astutely drew attention to the Bitcoin Network’s unspent transaction outputs (UTXO) set size as a potential indicator in mid-November. The analyst explained that as UTXO increases, accumulation is occurring, but as the same indicator decreases, investors are presumably selling their BTC in an act of “distribution.”
Keeping this in mind, and considering that UTXO has been on a tear since July, even amid November’s 40% downturn, many believe that bulls continue to scale into long Bitcoin positions. However, the analyst noted that gradual accumulation won’t be enough to propel BTC to the moon, as it were. The analyst claimed that the unspent output indicator will need to see a “significant uptick,” coupled with a slight increase in Bitcoin price, to indicate that the bear market has finally run its course.
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