CryptoQuant CEO Ki Young Joo today pointed to significant similarities in Bitcoin market behavior between the current situation and mid-2020, a period marked by stagnant prices but high on-chain activity. Young Joo's ideas are illustrated by two key diagrams and shared via a post on X, drawing parallels that suggest a strong undercurrent of high-volume transactions, perhaps outside public exchange networks.
The first chart, which represents data through 2020, shows the price of Bitcoin along with the realized cap of new whales – a metric that tracks the total value at which newly acquired Bitcoin was last transferred by large investors. It is a variation of market cap that values each UTXO at the price it was last traded at, rather than the current market price. This metric reflects the actual realized value of all coins in the network, rather than their current market value.
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This value saw a sharp increase in mid-2020, precisely when the price of Bitcoin fell into a state of boredom just as it has in recent months, constantly trading around the $10,000 level. According to Young Joo, this period was characterized by high on-chain activity which later analysis indicated included over-the-counter (OTC) transactions between institutional players.
In the second chart, which extends out to 2024, a similar pattern emerges with a more pronounced growth in the realized maximum of new whales, although the Bitcoin price has been showing sideways movement for almost 100 days now. The chart indicates a significant addition of around $1 billion per day to the wallets of new whales, a term that typically refers to addresses holding large amounts of Bitcoin, which are often associated with institutional investors or individuals with significant capital.
What does this mean for the price of Bitcoin
Ki Young Joo explained these observations by saying, “The same vibe around Bitcoin in mid-2020. At that time, the value of Bitcoin was hovering around $10,000 for 6 months with high on-chain activity, and was later revealed to be OTC trades.” . Now, despite low price volatility, cross-chain activity remains high, with $1 billion daily being added to new whale wallets, potentially for incubation.
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He also pointed to a tweet from September 2020 that supports his analysis, noting that “the number of bitcoins transferred is at the highest level of the year, and these transmissions are not from exchanges. The percentage of funds flow across all exchanges is at the lowest level of the year. Something is happening.” Maybe OTC deals.
This comparison and the persistently high level of the achieved cap of new whales indicate an ongoing accumulation phase among large investors, reminiscent of the activity observed in mid-2020. Such movements are generally not visible on traditional cryptocurrency exchanges and indicate strong institutional interest that could be a precursor to significant moves. In the market. After Young-Ju's tweet, the price of BTC increased by 480% from September 2020 until November 2021.
Whether a similar move is brewing for the Bitcoin price remains to be seen, but the continued growth in Bitcoin holdings among new whales, coupled with sustained price levels, suggests pressure may be building beneath the apparent calm of the market surface. As noted in the past, such conditions could lead to significant price movements once accumulated Bitcoin begins to impact the broader market through increased liquidity or renewed trading interest.
At press time, Bitcoin was trading at $68,271.
Featured image created with DALL·E, chart from TradingView.com
