Bitcoin Mega Whales Have Been Reducing Their Supply Recently

The market intelligence platform IntoTheBlock has revealed how the largest of Bitcoin holders have been the ones applying selling pressure amid the price decline.

Bitcoin (BTC) dropped to new seven-week lows of $84,000 on Thursday, continuing the slide that began after the coin hit $94,000 last week. The plummet saw mega-whales, holding more than 10,000 BTC, step in as the primary sellers, while other investor cohorts engaged in buying activity.

According to data from blockchain analytics platform IntoTheBlock, mega-whales reduced their BTC holdings by 25,740 BTC (about $2.3 billion) over the last seven days.

At the same time, the remaining investor cohorts collectively engaged in buying activity. Specifically, smaller investors and those holding less than 1 BTC displayed net buying activity.

Chart: IntoTheBlock

“Despite the broader market downturn, smaller investors and those holding less than 1 BTC appear to be accumulating at the same time mega-whales are selling,” the analytics platform said in a recent post.

This observation is interesting because it suggests that smaller investors are viewing the price decline as an opportunity to buy more BTC, while the largest investors are booking some profits amid the downturn.

Moreover, mega-whales already began their selloff a few days ago, which might hint that they saw the price plunge coming and prepared for it in advance.

Another angle from which to view this downturn is through the different exchanges, as different platforms may host a different demographic of investors. Two exchanges that are generally of note in this type of analysis are Coinbase (NASDAQ:COIN) and Binance.

Coinbase is mainly used by entities in the U.S., especially large institutional traders, while Binance serves global investors. An indicator that can be used for tracking the difference in behavior between the two user bases is the Coinbase Premium Index.

This metric measures the percentage difference between the Bitcoin price listed on Coinbase (USD pair) and that on Binance (USDT pair). As CryptoQuant founder and CEO Ki Young Ju pointed out, the Coinbase Premium Index has been negative recently.

This trend, alongside the fact that Coinbase’s spot volume dominance has shot up recently (left chart), would suggest the American whales have been the main drivers during the crash.

Coinbase’s spot volume dominance has shot up recently (left chart), which may suggest that institutional traders, who prefer to trade in large quantities, are pivoting toward Coinbase.

At the same time, the Coinbase Premium Index has slipped into negative territory (right chart), which may indicate that the American whales are now selling more.

Both observations suggest that institutional traders, who largely operate in the U.S. and trade through Coinbase, have been dumping their BTC holdings during this crash.