Thursday, December 2

Bitcoin: whales push attack to highs

The price of bitcoin resumed the attack to its all-time highs on Tuesday, after the currency soared more than 4 percent and traded above $ 63,000.

The novelty is that the increases came with much less volatility than in other occasionss, reinforcing bullish momentum and bolstering investor sentiment.

While volatility has always been the trademark of bitcoin, especially in an environment of highs, things are different now.

Thus, during the recent assault on the highs of $ 67,000, lAverage volatility over the last 260 days fell to lows not seen since May, when the coin was trading at $ 40,000, according to Bloomberg data.

Buy bitcoins to keep them

The truth is that the different rallies that the digital currency has marked throughout its history have been very marked by the type of investors who star in them.

While in February and April it was the retailers who took control of the rebound, the difference now is the star role of the whales, the strong hands of the market, as advanced.

“They are large buyers and we can assume that they are institutional investors with a large portfolio”he told Alberto Toribio, Crytoplaza ambassador.

In slang, these investors are known as ‘hodlers’, they are the ones that come to the market with the vocation of buying and keeping the coins in their portfolio. And it is what is happening.

The bitcoin, in accumulation period

These buyers are the ones who have driven the last rally and have a very different behavior, since they usually buy in the large exchange houses and then make their deposits in cold wallets, that is, not connected to the network.

Their footprint is perfectly traceable on the blockchain and the impact they generate has a positive effect on the volumes traded, but not on volatility, as they are investors with a vocation for permanence.

Thus, “The investors who are participating make moderate and high purchases, of more than 200,000 euros, and this makes us think that we are in a period of accumulation, with which we do not believe that we are going to see much volatility, “he said. Toribio.

In this sense, Mike McGlone, an analyst at Bloomberg Intelligence, explained to that the lower volatility can be attributed to a process of “natural maturity ” of the currency itself and recalled the importance of the launch of the first ETF listed in bitcoins on Wall Street.

Bitcoin volatility could increase in the final stretch of the year

All in all, the final stretch of the year could be more volatile for the digital currency, according to the sources consulted.

If the price breaks the all-time highs again, it is very likely that a pull effect will be seen to attract retail investors, who in the end are the ones that cause volatility to increase.

Unlike institutional investors, who handle cold or Internet-connected wallets, retailers have a more speculative profile, because what they always tend to trigger currency volatility.

Bounce with strong volume

For now, the bullish rally of bitcoin is limited to what is described by the sources consulted. This is proven by, for example, the volume traded.

Until the half session of this Wednesday, 1,300 million dollars had been negotiated, 73 percent of what is negotiated on average in a full day.

The increases reached not only bitcoin but other cryptocurrencies. This is the case of ether, which was appreciating 4 percent and was already close to 4,500 dollars or Litecoin, which added 3.8 percent.

In addition, the first fund traded in bitcoins, the Proshares ETF, was moving away from lows and rising more than 3 percent, which was close to $ 41, already one step away from the $ 41.94 in which it was released on Wall Street.