On-chain data shows that bitcoin whales have just had their most active hours in about three months as the asset topped $30,000.
The number of bitcoin whale transactions has been on the rise recently
According to data from the on-chain analytics company saint259 whale transactions occurred two hours after the local peak that the cryptocurrency had observed over the past day so far.
A relevant indicator here is the “whale transaction count,” which measures the total number of bitcoin transactions made on the blockchain that have a value of at least $1 million.
In general, only whales are capable of transporting such large volumes with a single transfer, and these transactions can give us a hint about the degree of activity that whales are currently displaying.
When the value of the number of whale transactions is high, it means that a large number of large transactions are currently taking place on the network. Of course, such a trend would mean that whales are very active right now.
Because the amounts involved in these transfers are so high, a large number of them occurring simultaneously can cause significant fluctuations in the price of the asset. Thus, when the number of whale transactions increases, the cryptocurrency may become more likely to show high volatility.
Now, here is a chart showing the trend in the number of bitcoin whale transactions over the past week:
Looks like the value of the metric has been quite high in recent days | Source: Santiment on Twitter
As shown in the chart above, the number of bitcoin whale transactions has skyrocketed over the past day. This unusual spike in the indicator occurred about two hours after the asset reached its local peak and lasted for about an hour.
In this hour, the whales made 259 trades, the largest amount in more than three months. As for the effect of this rally on the price of the asset, as mentioned earlier, higher values of the index can lead to more volatility in the cryptocurrency.
However, such volatility can go either way, as the metric only counts the net number of whale transactions that occur on the blockchain; It does not contain information about whether the transfers were made for the purposes of buying or selling.
However, additional context such as the direction of the prevailing price can help us to guess better about what these whales intend to achieve with these large transactions.
Since the rally in the index came right after the BTC peak, it is likely that the whales were looking to sell before the asset saw any further decline. The price continued to drop after these remittances, hinting that at least some selling was taking place.
This decline has been short-lived so far, as Bitcoin has already recovered back above the $30,000 level. This could be a sign that although some selling occurred, it was still at low enough levels that the market was able to digest it nicely.
BTC price
At the time of writing, Bitcoin was trading at around $30,100, up 21% in the past week.
BTC has surged during the last couple of days | Source: BTCUSD on TradingView
Featured image by Todd Cravens on Unsplash.com, charts from TradingView.com, Santiment.net
