Bitcoin’s whale position has recently transitioned from an extended period of deposits at exchanges to withdrawals from exchanges. The trend shifted around the end of August, after nearly three months of overall deposits.
This trend lasted about twice as long as any other period of deposits since 2023. Since then, the 30-day moving average has been less than zero, indicating that whales have removed more Bitcoin [BTC] from exchanges than sent to them.
Additionally, the current number is close to the bottom side of the recent trading range, which adds credibility to this new whale behavior. Thus, the trend of whales adding supply to exchanges has decreased, in turn limiting potential sell-pressure during periods of increased price volatility.
In conclusion, the trend of whales supplying the market with additional coins has improved. However, sustained withdrawals will matter more than a short-term flow change.
Bitcoin holders return to profit
This is important to note regarding this movement of whales due to the fact that whales are once again generating profits. At writing time, Bitcoin was trading near $86,200, which is well above the whale and shark cost bases at $62,100 and $67,500.
At the same time, shrimp wallets were profitable through much of June’s lows, where they had a cost basis around $48,000. In contrast to 2022, Bitcoin fell beneath all cohorts’ realized prices, and overall losses increased the selling pressure, intensifying capitulation.
Price has since recovered the break-even level of the larger cohorts as it relates to the recent downturn and reduced pressure on those in underwater positions. At the same time, recovery by large holders will also increase the incentive to sell.
As such, the current structure looks healthier than 2022, but whale profit-taking could still create resistance if exchange supply rises again.
That said, the recovery also appears in Net Unrealized Profit and Loss (NUPL). The low point of this most recent downturn in NUPL occurred at +0.09 before rising to +0.38, an increase of about 300% in just three months.
NUPL has been positive since its trough, whereas it had fallen to -0.31 in the prior bear market.
This recovery is similar to one seen in early 2023, but prior to entering into a long-term bull phase. Thus, its worth noting that the current level of seller conviction is less than what existed in 2022.
However, returning profitability can encourage large holders to realize gains. If exchange deposits rise again, whale selling could create resistance despite the stronger structure.
Altogether, sustaining NUPL will help determine if profitability is supporting conviction rather than creating yet another distribution opportunity.
Final Summary
- Bitcoin strengthens its on-chain structure as whale withdrawals persist and major holder cohorts remain profitable.
- BTC shows healthier holder profitability than in 2022, but renewed whale deposits could trigger selling pressure.
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