Amid the ongoing crypto winter, the market is looking for several indicators that can potentially impact the price of assets like Bitcoin (BTC). One of the key indicators monitored is the action of Bitcoin whales in managing their holdings.
In this case, on-chain data indicates that a Bitcoin whale transferred 6,003.59 BTC ($117.6 million) from crypto exchange Binance in a single transaction, data shared by CryptoQuant community manager JA_Maartun on September 4 indicates.
Motivation for whale’s Bitcoin movement
Due to the anonymous nature of cryptocurrencies, it is near impossible to determine the owner of the Bitcoin address in question. However, amid the depressed markets, it can be assumed that the whale moved the Bitcoin to a more secure cold wallet, indicating that the investor has no intention of selling in the near future.
In some cases, most large holders prefer to have direct custody of their coins when they intend to hold them for a longer term, and the outflows are widely viewed to represent a bullish sentiment.
Besides security reasons, some whales usually distribute their holdings in different crypto exchanges to have liquidity. Watching whales’ selling and buying patterns is sometimes considered a good indicator of the asset’s price movement.
Notably, such significant transactions have been known to cause significant price volatility for Bitcoin.
Bitcoin whales criticism
Due to the ability to influence prices, whales have come under criticism for making Bitcoin centralized, moving away from the objective of promoting decentralized finance. Furthermore, the wealth inequality in Bitcoin has received criticism from crypto critics.
Interestingly, following the ongoing crypto market meltdown, most investors have appeared to ‘HODL’ the asset in anticipation of a possible rally. This is highlighted by a Finbold report on September 1, where 62% of Bitcoin holders had not sold the asset for over a year.
In the meantime, Bitcoin continues to struggle below $20,000 after breaching the level in the wake of a positive United States jobs report. By press time, the flagship cryptocurrency was trading at $19,600, falling almost 1% in the last 24 hours.