Are whales accelerating their Bitcoin sell-off, but it's still not a sign of panic?

Bitcoin fell below the key $100,000 mark last week, with recent selling by "whales" (investors holding large amounts of cryptocurrency) and other long-term holders being a significant driver of the recent price weakness. Most blockchain analytics firms define "whales" as individuals or institutions holding 1,000 or more Bitcoins. While the identities of most "whales" are unknown, blockchain data can still provide clues about their activities by tracking their cryptocurrency wallets. Data shows that some "whales" have recently accelerated their Bitcoin selling. Some analysts say this phenomenon is noteworthy but not necessarily a sign of panic. They point out that the recent selling may reflect steady profit-taking rather than panic selling, a pattern consistent with previous bull market cycles. Martin Leinweber, head of digital asset research and strategy at MarketVector Indexes, said such selling may reflect "planned asset allocation." “Some Bitcoin investors bought in when the price was in the single digits and have waited this long. Now there’s finally enough liquidity to sell without completely disrupting the market,” he told MarketWatch. Despite recent complaints from cryptocurrency bulls about a lack of market liquidity, Bitcoin is much easier to buy and sell than it was a decade ago. However, analysts at blockchain analytics firm CryptoQuant say the recent sell-off by “whales” is worrying because it coincides with deteriorating market sentiment and a slowdown in buying, which could put further pressure on Bitcoin prices. Dow Jones market data shows that the largest cryptocurrency briefly approached $19,400 on Friday, its lowest level since May 6. The sell-off by long-term and large holders is not unique to the current cycle. Analysts at blockchain data platform Glassnode wrote in a recent report that there are signs that the recent sell-off is driven by profit-taking rather than panic. Specifically, the selling behavior of "whale" wallets that have held Bitcoin for more than seven years and sell more than 1,000 Bitcoins per hour has shown a regular and uniform pattern over a period of time (see the chart below, data as of last Thursday, November 13).

The selling behavior of "whales" has shown regular and uniform characteristics over a period of time

The significance of the $100,000 mark

Meanwhile, Cory Klippsten, CEO of Swan Bitcoin, a financial services company focused on Bitcoin, and a long-term Bitcoin investor, said that the large-scale selling by "whales" in the past few months seems to be related to the $100,000 mark for Bitcoin—a level that many early adopters have long regarded as a psychological threshold for taking profits.

The selling behavior of "whales" has shown regular and uniform characteristics over a period of time

The significance of the $100,000 mark

At the same time, Cory Klippsten, CEO of Swan Bitcoin, a financial services company focused on Bitcoin, and a long-term Bitcoin investor, said that the large-scale selling by "whales" in the past few months seems to be related to the $100,000 mark for Bitcoin—a level that many early adopters have long regarded as a psychological threshold for taking profits.

The selling behavior of "whales" has shown regular and uniform characteristics over a period of time

The significance of the $100,000 mark