The data shows that a major price capitulation is still possible in the Bitcoin price, but more whales need to start selling first.
In its daily QuickTake market update on May 27, on-chain analytics platform CryptoQuant highlighted increasingly bearish whale behavior.
Some of Bitcoin’s largest holders are showing signs of impatience amid widespread belief that BTC/USD should trade below the key May 12 price of $23,800.
CryptoQuant contributor Binh Dang pointed out that whale selling has increased since April by looking at the unspent transaction outputs (UTXO) of different whale wallets.
Those entities holding $1 million or more in Bitcoin, the so-called "big whales," have increased their selling, while smaller whales, those holding under $1 million in Bitcoin, have slowly changed their position.
"After the decline at the end of January, we still saw accumulation as all the leading value lines rose, but from April 21 until now, the whales have been selling, and now we don't see any signs of accumulation," Dang explained road.
“If the smaller whales and retail investors give up, I think we will see absolute capitulation and bottoming. If not, I will keep an eye out for positive moves by whales in the $1 million range to consider a reversal.”
The accompanying chart shows a sharp decline in the realized supply of whales, with whales holding between $100,000 and $1 million in Bitcoin only now beginning to follow suit.
In contrast, whales in the $10,000-$100,000 and $1,000-$10,000 ranges show no signs of capitulating.
“Big whales are continuing to sell. Smaller whales and retail investors remain defensive,” added Julio Moreno, chief on-chain analyst at CryptoQuant, in a comment replying to Cointelegraph.
Meanwhile, data from Glassnode, another on-chain analytics firm, confirmed that the number of whale entities has declined overall.
The accelerating decline since April of this year once again points to a sell-off in whales, with the total number of whales as of May 27 at the lowest level since July 2020.
Bitcoin entities with balances over 1000 BTC vs. BTC/USD chart Source: Glassnode
In early May, whale buying levels formed a key support level below $27,000.
In the eyes of on-chain monitoring resource Whalemap, the data is interesting after the May 12 drop.
In a subsequent analysis, the researchers showed that predicting the occurrence of a BTC/USD capitulation event requires seeing high profits and losses in Bitcoin.
“Profits and losses were higher than usual on May 12,” explained a tweet from Whalemap, along with a chart of moving profit and loss (MPL) data.
“A typical Bitcoin capitulation sell-off occurred in December 2018, when there was similar (but larger) MPL activity.”
As reported by Cointelegraph, on-chain transaction volume has increased significantly this week.
Bitcoin Moving Profit and Loss (MPL) vs. BTC/USD Annotated Chart Source: Whalemap/Twitter
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