Bitcoin: Rising transactions cause speculation, more inside

Bitcoin Analysis

  • Whale transactions have increased to a level not seen in over six months.
  • Bitcoin’s exchange netflow suggested the absence of sell-offs.

Recently, a rise in Bitcoin [BTC] whale transactions coincided with a price drop caused by a market crash. Were these transactions indicative of a sell-off, or a strategic accumulation by the whales?

Bitcoin whales step up transactions

In the wake of recent price volatility by the king coin, transactions by Bitcoin whales increased noticeably. According to AMBCrypto’s analysis of Santiment’s chart, transactions over $100,000 rose notably around the 4th and 5th of January.

The chart showed that the number of transactions in this bracket was over 34,000. Notably, this marked the first instance of whale transactions reaching such heights since June 2022.

However, it’s worth noting that the transaction count had reduced to around 9,400 at the time of this writing.

Bitcoin whale transactions

Source: Santiment

Sell-off or accumulation?

The recent transaction surge by Bitcoin whales prompted curiosity about the trade direction. One approach to gaining insights is to examine the exchange flow of BTC during and after the rise in transaction counts.

AMBCrypto’s study of CryptoQuant’s exchange netflow data showed consistent negativity over the past few days. Except for the 4th of January, which witnessed a slight positive inflow of around 1,500, other days saw negative flows. 

Bitcoin netflow

Source: CryptoQuant

However, a closer look at the chart showed that the negative flow was insignificant, signifying many inflows.

As of press time, the netflow stood at -1,174. AMBCrypto’s analysis of the exchange flow suggested a lack of indications pointing towards a sell-off from major addresses. On the contrary, there were indications of minor accumulations.

This implied that some traders sought to capitalize on the marginal price decline.

Bitcoin volatility sees slight contractions

AMBCrypto’s examination of Bitcoin’s daily timeframe showed a noteworthy observation—it consistently maintained a position above its short-moving average (yellow line). Despite the ongoing decline, this showed that the overall trend remained positive.

Read Bitcoin’s [BTC] Price prediction 2024-25

An examination further revealed minimal fluctuations over the last three days. As of this writing, it was trading at over $44,290, showing a less than 1% increase.

BTC/USD price trend

Source: Trading View

A look at Bitcoin’s Bollinger Band (BB) suggested a slight reduction in BTC volatility at press time. The trend displayed a bullish stance, evident in the Relative Strength Index (RSI). 

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