Are Bitcoin Whales, Fishes’ actions in February similar to a previous bull cycle?

Saif Naqvi
Whales
Source: Pixabay

Bitcoin capped off February with a case of Monday blues after a highly volatile past week of trade. As per Messari, Bitcoin investors earned just 0.4% from their investments as relief rallies offset a month riddled with flash crashes, weak global markets, and rising Russia-Ukraine tensions. While the play among whales and retail traders has been known to be different at times, both groups were at a common consensus this time around.

Whales & Fish Calm Amidst The Storm

While the volatility was driven by large buy and sell orders, data from Ecoinmetrics showed that whales (holding between 1K-10K) and small fish (holding less than 1 BTC) did not deter from accumulating Bitcoin, with the buy range spanning between $35K-$45K. Coincidentally, Bitcoin forms a bottom when whales and small fish are both equally bullish on Bitcoin. The chart highlighted an important phase in July when both groups started to accumulate Bitcoin. Over the next two months, Bitcoin embarked on a 135% bull and formed a peak at $69K.

The situation was similar this time around as well. Both whales and small fish had begun the accumulation process. A Glassnode report showed that most wallet groups were adding Bitcoin to their balance in late February and those holding less than 1 BTC were the most aggressive in buying the dips.

Retail Activity – Volatility markets and new peaks

Retail activity carries significant potency by itself. A 2021 Ecoinmetrics report highlighted that Bitcoin’s push to $70K was assisted by retail accumulation even though whales began offloading at $60K.

Retail traders and market volatility share a symbiotic relationship. When volatility starts to rise, retail traders flock to the market driven by FOMO, hunting for outlier winners and a chance to make hefty profits. The past week was a perfect example of this phenomenon, with BTC’s token circulation hitting a 9-month high on 27 February amid high retail activity.

What does this tell us?

Source: TradingView

Bitcoin enjoys prolonged periods of growth when both whales are retail traders are moving in the same direction. Since February, the market has mostly ranged between $35K-$40K and the abovementioned data has factored into Bitcoin’s price. With that said, the data, combined with a volatile market makes the next bull run an enticing prospect.