The recently published data from cryptocurrency exchange OKEx gives one possible explanation of how larger holders of bitcoin – or “whales” – were able to affect the prices as bitcoin rallied to a new all-time high earlier in November.
Within that period of time, the price of the leading cryptocurrency Bitcoin [BTC, -1.74%] run-up, institutions and whales were able to buy dips and oftentimes sell when prices went up. That left the bulk of the retail investors scrambling to chase the rally, consistent with a newly released OKEx data report.
Trading data of the bitcoin/tether pair on OKEx’s platform between August and November reveal that earlier in the November bitcoin rally, whales’ like individual investors with sizable holdings and, potentially, institutions were taking profits by selling their bitcoin. Within the same month, smaller-sized traders, like retail investors, continued purchasing as they did earlier in September and October, despite higher prices within the oldest cryptocurrency, consistent with the report compiled by OKEx and blockchain data firm Kaiko.
Moreover, within the month’s end dip of November, as bitcoin’s price was approaching its new all-time high, a glance at the day-by-day trading activity of various groups of users on OKEx revealed that whales and institutions purchased the Thanksgiving price dip, while retail and other smaller traders panic-sold their bitcoin during that tiny market crash on 26th Nov.
In line with the report, the info indicated that while large bitcoin holders are “in the business of purchasing for low and selling high,” they’re not necessarily curious about buying bitcoin into rallies the way retail investors are.
“Ultimately, [whales] seek to drive the market, shake out retail traders in panic and maximize opportunities to shop for relatively cheap coins,” consistent with the news release from OKEx. “For retail traders, and everybody else in between, the selection seems to be between two options: swimming with the tide or against it.”
On the other hand, data from another cryptocurrency analysis firm, CryptoQuant, features a slightly different take. Its view is that throughout 2020 bitcoin whales have almost never missed a “buy the dip” opportunity.
One CryptoQuant conclusion is that the large-sized traders may have halted bitcoin’s price from crashing further and instead drove each price rally, potentially making profits by selling bitcoin at higher prices.