Drop in Bitcoin! ‘Whale’ Suggests Market May Be Decentralizing.

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CoinDesk reports: “The number of addresses holding a large number of bitcoins, popularly known as whales, has declined to 14-month lows. However, the drop isn’t necessarily a price-bearish development and may instead that the distribution of bitcoin ownership is shifting”. 

“As of Sunday, there were 103 addresses holding at least 10,000 BTC – the lowest since May 2019, according to blockchain analytics firm Glass node. The number has declined by 8% over that 2.5-month period.  Some may see the decline in the whale addresses as a sign of weaker buying pressure and anticipate a price drop as a result. However, Richard Rosenblum, co-founder, and co-head of trading at crypto liquidity provider GSR suggests otherwise”. 

“Over time, you would expect [bitcoin] to naturally dissipate to more hands,” said Rosenblum.

Blockchains are transparent and allow every single transaction to be viewed and analyzed. Even so, drawing definite conclusions from metrics like address growth can be challenging, as a single user or an exchange can own multiple addresses. “Whales may not be having all of their holdings in a single address and moving crypto for risk management purposes,” said Simon Peters, a crypto market analyst at investment platform Toro”. 

“As such, an increase or decrease in the number of bitcoin addresses may not fully represent the entry or exit of investors”.

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