As Bitcoin [BTC] Whales Start Selling, Market Demand Remains High

As Bitcoin [BTC] struggles on its price charts, it seems whales have also started to sell. According to recent data from IntoTheBlock, Bitcoin's supply

Bitcoin [BTC] price has been struggling to break out to new all-time highs despite the anticipation in the market. However, new data from IntoTheBlock suggests that the supply held by whales has been steadily decreasing in recent months.

As the chart above shows, the aggregate amount of BTC held by large holders (defined as entities controlling 1,000 to 10,000 coins) has declined to its lowest levels since 2019. This decline, highlighted in purple, marks a six-year low in whale supply.

When supply held by whales hits such lows, it suggests a significant shift in market dynamics. This implies that whales, key institutions and large investors, are actively participating in the market by selling their BTC holdings.

This could be explained by institutions needing liquidity to cover operational costs as the price of BTC declines or large holders, such as the founders of Bitcoin, completely closing out their positions after a long period of holding.

Notably, this change in supply dynamics could imply several things. First, it suggests that whales are redistributing to retail investors, which might result in more decentralization, reducing whale-induced market trends.

As such, if whales are selling, while the market demand still remains relatively high, it suggests that supply is getting to the broader base of investors.

Looking at Bitcoin’s exchange netflow, it suggests that the market demand remains relatively high. As such, the market is experiencing more outflows than inflows.

This suggests that while whales have sold, the rest of the market still has a high demand for the asset, which is critical for price stability and prevent a sharp downturn.

However, with whale supply hitting multi-year lows and the market experiencing more outflows, it begs the question: What’s next for BTC?

For starters, although whale supply has declined, Bitcoin is not experiencing high selling pressure. We can see this as the fund flow ratio to exchanges has also been declining over the past week.

When the fund flow ratio declines, it suggests that there are fewer exchange deposits, thus current holders are not planning to sell. This signals long-term holding behavior as investors continue to accumulate their BTC.

Therefore, since whale supply is declining meaning they are selling while other investors continue to hold, it suggests that markets will continue to consolidate as buyers absorb selling pressure without driving prices up.

Consolidation here is most probable, as buyers are not strong enough to fully absorb the selling pressure and still push prices to higher resistance.

If consolidation is positioned to continue, BTC must consolidate above $84,640 as per Alphractal.

If the price consolidates above this level, it is likely to form a local bottom before pushing to new all-time highs in the near future.

However, if Bitcoin stays below $84K for several days, the next target on the CVDD Channel is $64,700, which coincides with the April 2021 all-time high.