Recent data shows that Bitcoin whale activity has declined significantly since the cryptocurrency hit its yearly high in March.
Blockchain analytics platform Santiment recently X [tweeted] that high-value Bitcoin transactions — typically those worth more than $100,000 — have fallen 33.6% since March 13.
This date coincides with the day Bitcoin reached its all-time high of $73,679.
Reduced whale activity is not a bearish signal
A slowdown in activity among major Bitcoin holders, commonly referred to as “whales,” isn’t necessarily a bearish sign, Santiment said.
Whales are defined as wallets holding at least 10,000 BTC and are known to have a significant impact on market movements.
They tend to be active in both bull and bear markets, often waiting for periods of extreme market sentiment, such as heightened fear or greed, to make significant moves.
Santiment noted in the report that the decline in whale activity is also evident on Ethereum (ETH), where large transactions worth $100,000 or more have plummeted 72.5% since mid-March.
Despite the downtrend, Santiment stressed that the trend does not signal a recession.
Rather, it may mean that these major stakeholders are closely monitoring market sentiment and preparing for future opportunities.
🐳 Cryptocurrency's whale transactions have seen a noticeable drop-off since mid-August
🪙 Bitcoin: -33.6% drop in $100K+ transfers since March/April peak
🪙 Ethereum: -72.5% drop in $100K+ transfers since March/April peakThis isn't necessarily a bearish signal. Whales can be… pic.twitter.com/iGNRt2roPL
— Santiment (@santimentfeed) September 11, 2024
The overall mood in the cryptocurrency market right now is one of fear.
The Cryptocurrency Fear and Greed Index, which measures market sentiment from 0 (extreme fear) to 100 (extreme greed), gave a score of 31, indicating that fear is dominant.
Historically, investors have viewed periods of fear as potential buying opportunities, as prices tend to fall during these periods.
Bitcoin is down slightly by 0.97% since mid-August, trading around $58,360, but some analysts believe the cryptocurrency could face further downward pressure.
Marcus Thielen, head of research at 10x Research, predicted in early August that Bitcoin could fall to $40,000 before its next bull run.
Santiment also suggested that if BTC were to drop to $45,000, it could create a wave of fear, uncertainty and doubt (FUD) in the market.
However, if the cryptocurrency bounces back to around $70,000, it could trigger fear of missing out (FOMO) among investors.
Bitcoin Activity Hits 3-Year Low
Activity on the BTCnetwork has dropped dramatically, reaching levels not seen in three years.
According to on-chain analytics platform CryptoQuant, overall “apathy” is affecting the cryptocurrency market, with BTC trading volumes dropping significantly.
In a recent Quicktake blog post, CryptoQuant revealed that the number of active addresses on the BTC network has fallen from nearly 1.2 million at its peak in mid-March to just 838,000.
By late August, that figure had fallen further to 744,000, the lowest daily tally since 2021.
“The total number of active addresses on the BTC network is expected to hit an all-time low in 2024, reaching levels similar to those seen three years ago when Bitcoin was trading around $45,000,” CryptoQuant contributor Gaah writes.
He added that fewer active addresses means less network activity, meaning fewer transactions are taking place, which could be a sign of less interest in using the network.
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