Whales Are Building Their Positions On Derivatives

On-chain data shows whales are sending their Bitcoin from spot exchanges to derivatives, indicating that they are building up their positions.

Bitcoin Whales Build Up Their Positions On Derivative Exchanges

As pointed out by a CryptoQuant post, Bitcoin whales seem to be moving their crypto from spot exchanges to derivative exchanges.

The relevant indicator here is the “all exchanges to derivative exchanges flow mean,” which shows the total amount of coins being transferred from spot exchanges to derivative exchanges.

When the value of this metric shows continuous high values, it means a lot of Bitcoin is being regularly moved to these derivative exchanges, which may hint that whale activity has been going on.

Low values would imply not many coins are moving in this direction, and could either be staying still, or be rather going the opposite way: from derivatives to spot.

Now, here is a chart that shows the trend that this indicator has followed over the last couple of years:

The BTC all exchanges to derivatives flow mean vs the price | Source: CryptoQuant

The above graph has different regions marked based on whether whales seemed to be accumulating at that time or not.

Related Reading | Despite New ATH, Bitcoin Exchange Reserves Continue To Decline

The green regions were when the price was mostly moving sideways and the indicator had the whales sending a lot of BTC to derivatives.

Following these periods of accumulation, the price had always shown a jump up during the period of the above chart.

However, once the indicator’s value became very low, BTC’s price has seemed to have made a top after which its value dipped down.

Related Reading | Lucky Buyers Possibly Bag $8K Bitcoin During Early Morning Flash Crash

Now, as is apparent in the graph, the current trend makes it look like whales have just started another phase of accumulation. This could turn out to be bullish for the future price.

BTC Price

At the time of writing, Bitcoin’s price floats around $61.5k, up 2.7% in the last seven days. Over the past month, the crypto has accumulated 42% in gains.

The below chart shows the trend in the price of the coin over the last five days:

BTC's price seems to be rapidly plunging down | Source: BTCUSD on TradingView

After setting a new all-time high (ATH) of $67k, Bitcoin has been sharply going back down in the past couple of days. It’s unclear at the moment which trajectory the coin might follow next, but if the spot to derivatives flow mean is anything to consider, whales seem to be accumulating. This could help the price bounce back up and set it up to reach higher ATHs.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com