“Small fish” redeems the fall of Bitcoin
The actions of whales (balance > 1,000 BTC) and small investors (balance < 1 BTC) differ depending on market conditions. So, in March 2020 and May 2021, whales replenished stocks after a significant correction. At the same time, small players continued to get rid of coins, and the fear index went through the roof. Now the opposite picture is observed: whales are recording annual profits, and “small fish” is counting on a repeat of last year’s winter rally.
Above on the chart, blue dots mark prices when whales reduced their stocks, and owners of small wallets bought Bitcoin. This trend has been observed for the last month and a half and may increase due to the reaction of leading central banks to rising inflation.
In the United States, prices for consumer goods rose by 6.8%, and producer selling prices jumped by 9.6%.
This forced the Fed to cut the monetary stimulus program in half, from $120 billion to $60 billion, and next year the committee members expect three increases in the federal funds rate. Loans will become more expensive, and the dollar will get a reason to strengthen. This will reduce the appetite for risk and will entail the outflow of large capital. The sale of Bitcoin has already led to an increase in the turnover of stablecoins – a similar situation was recorded in May of this year.
However, the executive director of Galaxy Digital Holdings (TSX:GLXY) Mike Novogratz believes that the price will not fall below $42 thousand, since cryptocurrencies are only at the beginning of the path of introduction into the modern financial system.
The same opinion is held in MicroStrategy Incorporated (NASDAQ:MSTR) (the largest public holder of Bitcoin), continuing to increase the balance. Last week, the company bought another 1,434 BTC, increasing the stock to 122,478 BTC. Its head, Michael Saylor, is one of the most ardent fans of Bitcoin, calling cryptocurrency the best means of saving in the XXI century. For all time, Microstrategy has spent $3.7 billion on the purchase, while the current value of the portfolio is $5.8 billion.