Analysts at Whalemap has now given out data showing that institutional players have been starting to accumulate Bitcoin, doing so within the $12,000 and $15,00 range. According to Whalemap, this trend is a positive one, seeing as whales and institutional players typically hoard assets as a longer-term investment.
Whales Gobbling Mainstream Interest
Bitcoin has seen a rather suppressed level of mainstream interest, as of late, and it could very well be thanks to these heavyweight investors starting to accumulate Bitcoin instead of having it be spread out by numerous retail investors.
As it stands now, the mainstream demand for BTC has been rather lackluster, as far as Google Trends is concerned, in spite of the parabolic rally that’s been seen in recent months.
Analysts from Whalemap have come to describe this massive demand spike from whales as an “institutional FOMO” event. FOMO stands for “Fear Of Missing Out”, and describes trends where any group starts to pile in on something due to fears regarding missing out on it.
In this case, it’s investors buying up BTC because they’re scared they won’t get a piece of that juicy price surge, which ironically enough catapults the price forward even more.
Massive Whale Clusters Reported
In a Twitter post, Whalemap had its analysts show how whale clusters were starting to form, with more BTC flowing into pre-existing whale wallets. In its tweet, Whalemap simply stated that the massive increase in clusters is what FOMO looks like on an institutional level.
These are the levels and this is what institutional fomo looks like 🙂 pic.twitter.com/xw38JooSeV
— whalemap (@whale_map) November 13, 2020
Whale clusters describe when pre-existing whale addresses, that is, wallets holding over 10,000 BTC, starts to buy up more Bitcoin without moving them for any prolonged period of time.
Through this, Whalemap analysts state that this shows that the whales are planning to keep their recent purchases of BTC within their personal wallets.
The Time Is Ripe For BTC
Whales accumulating Bitcoin in such an aggressive manner can primarily be blamed for two key trends that have been in the crypto markets since October.
The first trend is the spot market leading the derivatives market, instead of the other way around. What this means is BTC’s funding rate is rarely over the average of 0.01%, even if the price of it is increasing.
Another key factor is the massive drop in short-contract liquidations within this recent rally. In the past, BTC rallies typically resulted in more than $100 million worth of contracts being liquidated across the major exchanges. All of these factors make it clear that this rally isn’t just a short squeeze; it’s an actual accumulation phase.