Bitcoin’s ‘Elon Musk pump’ rally to $48K was exclusively driven by whales

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The price of Bitcoin (BTC) rallied to above $48,000 on Feb. 9, and has been consolidating since. Analysts from Material Indicators found that whales were the primary driver of the rally.

This is largely considered a bullish sign. The probability of a Bitcoin top would increase when retail investors enter into the market en masse, as both the spot and derivatives markets get overheated.

Why are whales driving the price of Bitcoin up?

In recent months, so-called “mega whales” sold large amounts of Bitcoin between $33,000 and $40,000.

Orders ranging from $1 million to $10 million rose significantly across major cryptocurrency exchanges, including Binance.

But as the price of Bitcoin began to consolidate above $33,000 after the correction from $40,000, the buyer demand from whales surged once again.

Analysts at “Material Scientist” said that whales have been showing unusually large volume, around $150 million in 24 hours.

This metric shows that whales are consistently accumulating Bitcoin in the aftermath of the news that Tesla bought $1.5 billion worth of BTC. They said:

“And finally, whales are still driving this whole thing and are up big-time! Why is blue up so much, you might ask. Bc of whales having an unusually large abs net vol ($150M in last 24h)! Usually, they only make up a tiny fraction of the tot CVD, but now they’re the majority. So, this move to $50k was almost exclusively whale-driven!”

Bitcoin whale CVD data. Source: Material Indicators

Why now?

Analysts say that the frenzy around public companies owning Bitcoin creates a positive market sentiment around the dominant cryptocurrency.

Filbfilb, a pseudonymous Bitcoin trader, said that in the current economic environment, shareholders would likely demand pubic companies to secure exposure after Tesla derisked holding Bitcoin. 

Additionally, Raoul Pal, the CEO of Real Vision Group, also emphasized that Bitcoin is still early in its rally.

In terms of mainstream awareness, there is still generally a low level of awareness of Bitcoin among casual investors. In 2017, many retail investors were rushing to purchase Bitcoin. Pal explained:

“Today I had a zoom call with my oldest, best friends I’ve know from 6 years old, onwards. Some are wealthy and some are struggling. Only 2 own bitcoin out of 12 and I’ve begged and pleaded for a year. On the other hand my yoga teacher keeps asking for payments on bitcoin ! Early.”