Bitcoin shows promise as accumulation starts to pick up pace. However, whale activity remains low, suggesting a cautious stance.
- Bitcoin addresses with some BTC balance continued to grow, as buyers took advantage of the dips. Assessing the risk of Bitcoin’s price potentially dipping below key levels.
Two major Bitcoin [BTC] narratives have been dominant for the last few months.
One is the prospect of a major rally, and the other is the possibility of Bitcoin’s rally being cancelled and price potentially falling below $50,000.
The two Bitcoin possibilities have provided a chance for whales and institutions to take advantage of emotionally charged price swings, At least this has been the case in the last five months.
Bitcoin dipped below $50,000 once courtesy of a major panic selling event in August.
The sell pressure incident was followed by rapid capitalization as traders moved in to buy at a discount. The latest incident of downward pressure last week saw the bears failing to push below $52,000.
Glassnode’s data confirmed a resurgence of accumulation.
Source: Glassnode
According to Glassnode, the level of accumulation by addresses with zero balances was close to 53 million addresses at press time, a healthy recovery from August lows.
However, this was still significantly below the heights observed at the start of July, signaling that there was still some level of uncertainty in the market.
Also worth noting is that Bitcoin’s exchange reserves were back on the downtrend. This confirmed that fewer coins were available on exchanges, contrary to the slight uptick observed at the start of September.
Source: CryptoQuant
Lower exchange reserves are good news for the bulls, and it aligns with the growing non-zero addresses. However, it is not a clear indicator of what whales and institutions have been doing.
Bitcoin’s other extreme
As far as whales are concerned, we found that whales are less active in September so far, than they were between June and August. Whale inflow data indicated a slowdown in the last two weeks.
Source: IntoTheBlock
The low whale participation coincided with the low Bitcoin ETFs demand, judging by the dominant outflows. This further aligned with the observation that Bitcoin’s trend appeared to be falling in the last five months.
BTC has been achieving lower highs each time the bulls made an attempt, thus confirming lower bullish confidence.
In other words, there is still a significant risk of Bitcoin potentially sliding towards $50,000 and possibly lower. On the other hand, many whales currently on the sidelines would likely capitalize at a discounted level.
It is also possible that many savvy traders are waiting for clearer market data from the FED next week before any big moves.
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