Wealthy investors look to be making a comeback into the bitcoin market, a blockchain metric that warned of a price drop in early May shows.
- The number of coins held by whale entities – clusters of addresses controlled by a single network participant holding 1,000 to 10,000 BTC – rose by more than 80,000 to 4.216 million BTC on Friday, hitting the highest level since May.
- The tally remained largely unchanged on Saturday, according to data provided by Glassnode.
- The number of whale entities has also jumped to a three-week high of 1,922.
- The renewed accumulation by whale entities is good news for the market, as these wealthy investors played a significant role in powering bitcoin higher from $10,000 to nearly $60,000 during the five months to February.
- The balance held by whale entities rose in tandem with the price during the bull run, hitting a record high of 4.542 million on Feb. 8.
- Whales became sellers in the subsequent months, taking the wind out of the bull run, and by early May, their bitcoin stash had dropped by 8% to 4.17 million BTC.
- Bitcoin mostly remained coiled in the range of $50,000 to $60,000 during that period, barring a brief spike to a record high of $64,801 in mid-April.
- The price action highlighted the inability of smaller investors to do the heavy lifting and signaled the potential for a notable price correction. Bitcoin fell by 35% in May, hitting lows near $30,000, and dipped further to $29,031 in June, according to CoinDesk 20 data.
- The latest uptick in the whale balance suggests the bottom may have been reached.
- The cryptocurrency is trading near $35,500 at press time, representing a 2.3% gain on the day.
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