Bitcoin whale activity has seen a sharp decline since the cryptocurrency hit its yearly peak in March 2024, according to recent data from blockchain analytics platform Santiment. Large Bitcoin transactions, typically valued at $100,000 or more, have fallen by 33.6% since March 13, the same day Bitcoin reached an all-time high of $73,679.
Decline in Whale Activity: Not Necessarily a Bearish Signal
Despite the drop in whale transactions, Santiment suggests that this trend is not inherently bearish. Bitcoin whales—wallets holding at least 10,000 BTC—are known for their strategic market timing, often acting during periods of extreme market sentiment, such as fear or greed. These major players tend to make significant moves in both bull and bear markets, often waiting for the right moment.
The decline in large Bitcoin transactions mirrors a similar drop in Ethereum (ETH) activity. Santiment reported that large ETH transactions over $100,000 have plummeted by 72.5% since mid-March. However, this reduction in activity from large stakeholders is not necessarily a sign of weakness. It may indicate that whales are holding back, waiting for future opportunities as they keep a close eye on the market’s mood.
Market Sentiment Leans Toward Fear
At present, the overall sentiment in the cryptocurrency market is one of caution, with the Crypto Fear & Greed Index sitting at 31, indicating a market dominated by fear. Historically, fear-driven markets have been viewed as potential buying opportunities, as lower prices often accompany them.
Bitcoin has seen a slight dip of 0.97% since mid-August, trading at around $58,360. Some analysts, including Markus Thielen, head of research at 10x Research, have forecasted that Bitcoin could drop into the low $40,000 range before preparing for the next bull market. Santiment also highlighted that if Bitcoin were to fall to $45,000, it could trigger widespread fear, uncertainty, and doubt (FUD). Conversely, a rally to $70,000 could spark a wave of fear of missing out (FOMO) among investors.
Bitcoin Network Activity Hits Three-Year Low
Further reflecting the cautious mood in the market, onchain analytics platform CryptoQuant reported that Bitcoin’s network activity has reached its lowest point in three years. Active addresses on the network have dropped significantly, falling from a peak of nearly 1.2 million in mid-March to just 744,000 by late August 2024—the lowest daily tally since 2021.
In a recent blog post, CryptoQuant contributor Gaah explained that the decline in active addresses suggests fewer transactions are taking place on the network, indicating a broader sense of “disinterest” in the market. This slowdown in network usage mirrors the decline in whale activity and could signal a temporary cooling of enthusiasm among Bitcoin users and investors.
Despite these indicators of reduced activity and caution, the cryptocurrency market remains dynamic, with many watching closely for the next potential move, whether it be a deeper correction or a rally to new heights.
