The month of March is almost over, and we can understand that throughout the week Bitcoin whales have not rested. After our usual monitoring we found at least 110 reports of activity with Bitcoin according to Whale Alert, for a total of 178,369 BTC. Below we present the trends of Bitcoin whales from March 21 to 28, 2021, and the possible short-term prospects, taking into account their activity with BTC.
We reiterate that this is only a micro approach to the development of the activity of Bitcoin whales, whose purpose is informative and indicative. It does not represent a global view of all the factors that influence the price of Bitcoin.
What have Bitcoin whales done this week?
The week that just ended saw a huge boom in Bitcoin whale activity. Unusually it started with a fairly quiet Monday and ended with a fairly active Sunday so to speak. The flow of activity showed that the days where whales mobilized the most BTC were from March 24-26.
According to our summary chart, the predominant trend in terms of amount of BTC transferred was again the movement between unknown wallets. In this sense, the whales transferred 118,107 BTC, which represents 66.21% of the total mobilized in the week.
Next, we found that there were 22,581 BTC that moved from unknown wallets to exchanges (12.66% of the weekly total) and 21,371 BTC transferred in the opposite direction. That is, only 11.99% of the total mobilized accumulated. As we see, this week the selling pressure was slightly higher than that of accumulation, but it is still a fact. Finally, we found that 16,310 BTC were mobilized between exchanges (9.14% of the total).
And where is BTC headed? The answer lies in inflation expectations
One of the main things that could derail Bitcoin from its current trajectory are the dynamics coming from the external global macro environment. From the point of view of an institutional investor, the two main theses of investing in Bitcoin are its value as a hedge of inflation and its value as a technological instrument.
The busiest day with BTC, March 25, was characterized by a mobilization of 12,865 BTC to exchanges. At the time, the price of the cryptocurrency was undergoing a correction. Such a correction of Bitcoin in the last few years was simply caused by a general fall in equities.
According to a Glassnode report, this was in part due to the quarterly readjustment of institutional investors, increased uncertainty regarding Brazil’s new COVID variant, and interest rates that continue to rise.
We can observe that from a 30-day moving correlation between Bitcoin and the S&P 500 we have now reached levels last seen in October and March 2020. However, other correlations with gold, bonds and the dollar index (DXY) have actually declined significantly.
The pandemic continues, and so do the measures of the central banks that have to do with stimuli and printing of banknotes. Thanks to this, Bitcoin is already challenging gold as investors ‘ choice for ideal hedge against inflation. According to Glassnode, in 2020, only in the Grayscale BTC trust, the inflows exceeded the amount of newly mined Bitcoins in the fourth quarter by 200%.
Recommendations
Short-term inflation expectations have risen sharply in recent months and Bitcoin has benefited from it. If you are a BTC investor, we recommend that you keep an eye on the Federal Reserve’s statements about its future policy prospects. We also recommend that you keep track of economic data sensitive to inflation expectations, such as PMIs, in search of surprises up or down in the expected economic activity.
Potential investments from savings and stimulus provided to American households will be an important factor that could determine market performance for the remainder of the second quarter. We also recommend always monitoring the activity of Bitcoin whales, either with our reports or on your own account, because at least this week, the report confirms the status of their intentions in the short term. They hold most of their tokens, but in the setbacks they have started to sell, as they expect some upheaval in the coming days.
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