A new report from cryptocurrency exchange OKEx and analyst firm Kaiko provides one possible explanation for what big bitcoin holders – the so-called „whales“ – were doing during the price rally in November, when bitcoin rose to new highs.
The report analysed data from the BTC/USDT market on OKEx between 1 August and 30 November 2020. Analysts claim that the „whales“ were selling as the price approached a new all-time high ($19,850 on OKEx). At the same time, retail investors continued to buy.
„It appears that large traders, whales Bitcoin System and institutional investors who have accumulated BTC at around $10,000 decided to lock in profits during this rally, while most retail traders continued to increase their positions amid rising prices. The result could be that retail traders are trapped in the short to medium term – BTC is currently trading below $19,000 – but given that the overall market sentiment remains bullish, their losses could be short-lived,“ the OKEx report said.
„For all the hype surrounding bitcoin’s bullish rally, the data in this report serves as a reminder that big traders, whales and institutional investors are busy buying low and selling high. It is not in their interests to keep buying coins at new highs and making them even more expensive. Ultimately, as the data shows, they seek to drive the market, sow panic among retail traders and take advantage of opportunities to buy relatively cheap coins. For retail traders and everyone in between, the choice is between two options: swim with the current or go against it,“ OKEx analysts conclude.