The activity of the largest players on cryptocurrency exchanges has reached its highest level in the last six years, which may indicate the formation of a market bottom and the potential beginning of a new crypto market uptrend.
This is reported by Finway
Exchange Whale Ratio Hits Record High
According to the analytical platform CryptoQuant, the ratio of large Bitcoin holders (so-called “whales”) on exchanges has now reached its highest mark in six years. This refers to the Exchange Whale Ratio indicator, which reflects the share of Bitcoins accounted for by the ten largest transactions on the exchange.
Experts note that large players are currently actively accumulating Bitcoin, while the share of retail investors in transactions has reached a minimum for the same period. This situation is atypical for the market and may indicate the end of the price decline phase.
Why Whale Behavior is Important for the Market
CryptoQuant analysts emphasize that large players traditionally act contrary to retail investors. During market downturns, whales typically buy up assets, while smaller participants often panic and sell. When prices rise, whales take profits, and retail investors tend to enter the market at price peaks.
“Analysts believe that active accumulation by large players may indicate the formation of a market bottom.”
The increase in the Exchange Whale Ratio in the past has repeatedly coincided with periods of local market bottom formation, which preceded the start of an upward trend. Therefore, the current dynamics of the indicator are viewed by experts as a potential signal for a change in market direction.
Additionally, CEO of CryptoQuant Ki Young Ju stated that most experts analyzing Bitcoin are extremely optimistic about its future.
According to the analytical company Santiment, the volume of Bitcoins on exchanges is currently the lowest since November 2017. Analysts note that over the past eight years, the cryptocurrency market and financial technologies have significantly evolved, which also affects the current dynamics.
Previously, CryptoQuant highlighted that the share of Bitcoins at a loss is approaching 45%, which may also serve as an additional sign of reaching a market bottom.