If you’ve been on Crypto Twitter at all over the past few hours, you’ve likely noticed a lot of buzz about Bitcoin, specifically large BTC transactions. CoinDesk’s Wong Joon Ian noted that “either @whale_alert (a bot tracking large and suspicious cryptocurrency transactions) is broken or several billion worth of BTC just moved around in a few minutes.”
Umm.. either @whale_alert is broken or several billion worth of btc just moved around in a few minutes
— Wong Joon Ian 💸 joonian.eth (@joonian) December 6, 2019
Indeed, Whale Alert registered a series of over 10 transactions of over 50,000 BTC (worth over $400 million as of the time of writing this) in the span of some twenty minutes.
Many analysts quickly reacted to the transactions, making claims that they signify that the Bitcoin price bottom is in, or that a strong BTC drop is about to take place. Unfortunately for traders, the transactions likely mean none of that.
Why are Billions in Bitcoin Moving?
So why are the funds moving? What does it mean for Bitcoin? And who is the entity playing around with hundreds of millions worth of the leading cryptocurrency?
Well firstly, to clarify, the funds were not being moved by multiple entities. As The Block’s head of research, Larry Cermak, pointed out, “it’s the same address constantly moving the same stash. The 55,337 BTC (~$410.6M) is now parked in this address,” then drawing attention to a new address in which there are thousands of coins deposited at.
Everyone is freaking out that billions of dollars in BTC is being moved but in reality, it’s the same address constantly moving the same stash. The 55,337 BTC (~$410.6M) is now parked in this address: https://t.co/gA337GTtZc https://t.co/Gkdt8nPgdC
— Larry Cermak (@lawmaster) December 6, 2019
As to why the funds are moving, Whale Alert itself noted that the transactions can likely be classified as “peeling transactions” which is “normal behavior for wallets that many exchanges use.”
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This process is usually called peeling and is normal behavior for wallets that many exchanges use.
— Whale Alert (@whale_alert) December 4, 2019
Right now, it isn’t too clear that the “peeled” funds are being used for.
Precursor to Bull Run?
While this uptick in transaction volume seems to just be an exchange doing, well, exchange things, analysts think that the uptick in Bitcoin’s on-chain metrics hint at an impending price bull run.
Per previous reports from NewsBTC, creator of Look Into Bitcoin, one Philip Swift, remarked in a ten-part Twitter thread that he thinks the next macro BTC bull market is near. One of his main reasonings was that Bitcoin’s Network Momentum indicator, which tracks the movement of coins to determine the usage of the network, has begun to trend higher, bouncing off bear market levels. This is something often seen six to 10 weeks prior to the beginning of a bull market, Swift remarked.
4/ Also keep an eye on Bitcoin Network Momentum
At this point in prior cycles, we saw rapid increases in on-chain BTC volumes for 6-10wks b4 bull market started
— Philip Swift (@PositiveCrypto) December 5, 2019
That’s not all. He added that the cryptocurrency is holding above its 350-day simple moving average; this is important as the price moving and holding above this moving average “has always indicated the start of Bitcoin bull markets.” And also, the Golden Ratio Multiplier, an equation that the analyst created to analyze the BTC price, implies that the cryptocurrency could see an explosive move to $12,000 to $13,000 by January of February.
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