Bitcoin (BTC) whales have recorded an uptick in trading activity in recent weeks, with short-term holders (STH) surprisingly at the fore.
In its latest newsletter, “The Week On-Chain”, digital asset analytics firm Glassnode explained that since the price of BTC soared above $30,000 in June, there has been a slight shift among different levels of investors in Bitcoin.
Bitcoin whales exchange inflows hit a one-year high in July at 41%, following positive activity on the broader market. Observers have long noted that the actions of whales show an asset’s market health, leading to bulls understanding their ‘netflow to exchanges.’
“Whale-to-exchange net flows have tended to oscillate between ±5k BTC/day over the last five years. However, throughout June and July this year, whale inflows have sustained an elevated inflow bias of between 4.0k to 6.5k BTC/day,” Glassnode wrote.
Closely following whales, miners are also driving Bitcoin activities in exchanges as all-time high hash rates and mining difficulty looms. According to a report from Bitfinex, mining pools are deploying multiple strategies to sell large volumes of Bitcoin on exchanges.
Mining pool, Poolin accounts for most of the inflow as the report shows that overall, miners are hedging positions with derivatives exchanges tapping a 70,000 BTC 30-day volume this month.
“Miners are clearly bullish on Bitcoin as they commit more resources to mining, hence triggering the mining difficulty, but they are hedging their position, hence the despatch of more Bitcoin to exchanges,” the report stated.
Short-term holders light the way
The notion that BTC whales hold for extended periods may have slowed following a speculative investor trend in recent weeks. Short-term holders tend to keep assets for a maximum of 155 days, a trend that is now more common in exchanges.
Short-term holder dominance has spiked to 82% miles above the long-term holders’ range, which fluctuates between 55-65% in the last five years.
Short-term trading activity among whales boomed with the infamous implosion of FTX, leading to whales looking to tap into the volatile price movements in the market.
“From this, we can establish a case that much of the recent trading activity is driven by Whales active within the 2023 market (and thus classified as STHs). If we look at the degree of Profit/Loss realized by Short-Term Holder volume flowing into exchanges, it becomes evident that these newer investors are trading local market conditions,” Glassnode added.
BTC trades at $29,238 at press time, with outflows recorded in Bitcoin-related products after five weeks of consecutive inflows.