Bitcoin whales return to buy BTC — but are they Russians?

Number of Bitcoin addresses with more than 1,000 BTCs spiked on Tuesday.
The number of Bitcoin addresses with more than 1,000 BTCs spiked on Tuesday. Image from freepik and cryptologos

Key Takeaways:

  • The number of Bitcoin whale addresses reached a record high on Feb. 28.
  • BTC prices briefly broke above $45,000 reacting to the news.

NEW DELHI (CoinChapter.com) — An out-of-the-blue spike in Bitcoin (BTC) whale addresses sent BTC prices soaring upwards on Tuesday as traders flocked to buy the world’s largest cryptocurrency. To recap, whales are Bitcoin addresses that hold more than 1,000 BTC.

Historically, whale transactions influence price movements as their trade usually involve hundreds of millions of dollars. As a result, traders usually take whale accumulation as a buy signal. Conversely, they consider whale distribution as a sell signal.

Whale addresses account for more than 27% of the total Bitcoin supply. Data from Glassnode showed the number of BTC addresses with more than 1,000 increased by 148 addresses to reach a new all-time high on Feb 28.

Bitcoin whale addresses spiked on Monday. Source: Glassnode
Bitcoin whale addresses spiked on Monday. Source: Glassnode

The uptick saw BTC prices register their highest single-day gains since Feb 2021, with prices reaching $44,156 on Binance before the bears moved in to book profits.

Also Read: Fed to hike interest rates despite ongoing war in Ukraine – Will Bitcoin benefit?

Many analysts in the ‘cryptoverse’ attributed the spike in whale addresses to wealthy Russians looking for a hedge against the flurry of financial sanctions imposed on the country due to Russia’s attack on Ukraine.

For example, the US, EU, and other countries banned Russia from using SWIFT, an international network of banks that facilitates transactions. Other financial sanctions saw the Ruble drop to a record low of less than 1 US cent.

It Wasn’t Russia

However, the spike was due to a large WBTC custodian creating new addresses. In detail, Wrapped Bitcoin (WBTC) is a BTC-backed (1:1) ERC20 token, which means for every WBTC created, the custodian must hold an equivalent amount of BTC.

WBTC allows BTC holders to participate in various Ethereum (ETH) based protocols, such as staking. The uptake in the number of whale addresses was due to the on-chain movement of a WBTC custodian moving Bitcoins into new addresses.

Bitcoin exchange outflows remained largely unaffected. Source: Cryptoquant
Bitcoin exchange outflows remained largely unaffected. Source: Cryptoquant

In addition, there was no major increase in Bitcoin leaving exchanges, indicating the spike in addresses was likely due to a custodian shuffling wallets instead of 148 addresses buying more than 1,000 in Bitcoin.

Bitcoin Price Charts

On Monday, Bitcoin prices jumped nearly 18%, briefly breaking above the $44,000 price. BTC closed trading on Feb 28 near $43,000, losing nearly $1,000 from its intraday high. Bitcoin then started March with a short trip above $45,000.

Bitcoin price action over the last seven days. Source: CoinMarketCap.com
Bitcoin price action over the last seven days. Source: CoinMarketCap.com

However, it seems bears have moved in to book profits, as BTC prices fell below $44,000 during trading on Mar 2. Bitcoin’s 100-day (yellow wave) moving average rebuffed the digital token’s uptrend, but bulls would try to consolidate above $44,000.

Also Read: Bitcoin regains safe-haven status as BTC rallies over $44K amid Ukraine crisis.

If bulls fail to hold $44,000, BTC could fall to immediate support near $43,000. Next, strong selling pressure could see Bitcoin moving to $41,700. Finally, if Bitcoin fails to consolidate at $41,700 support, prices could fall to $40,000 before recovering.

Conversely, Bitcoin could move to challenge resistance at $45,430 once it flips 100-day MA into support. After consolidating above $45,000, BTC would likely target $46,700. A sustained buying spree could see the pioneer crypto move near $48,000 before corrections pare prices.

BTCUSD on the daily charts with MACD. Source: Tradingview.com
BTCUSD on the daily charts with MACD. Source: Tradingview.com

Meanwhile, momentum oscillator MACD charted a bullish crossover for BTC. Traders usually consider the technical chart pattern as a buy signal. The technical pattern forms when the MACD line (difference between 12-day and 26-day) moves above the MACD signal line (9-day EMA of MACD),

In addition, bars on the MACD histogram are expanding, indicating that bullish momentum is strong for Bitcoin.

At the time of writing, BTC was trading at $43,644, down 1.85% on the day.

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Bitcoin, Bitcoin whales return to buy BTC — but are they Russians?

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