Bitcoin supply held by ‘whale entities’ hits two-month high in bullish sign

Blockchain data shows wealthy investors are coming back to the bitcoin market.

Wealthy investors look to be making a comeback into the bitcoin (BTC, +0.59%) market, a blockchain metric that warned of a price drop in early May shows.

• The number of coins held by whale entities – clusters of addresses controlled by a single network participant holding 1,000 to 10,000 BTC – rose by over 80,000 to 4.216 million BTC on Friday, hitting the highest level since May.
• The tally remained largely unchanged on Saturday, according to data provided by Glassnode.
• The number of whale entities has also jumped to a three-week high of 1,922.
• The renewed accumulation by whale entities is good news for the market, as these wealthy investors played a significant role in powering bitcoin higher from $10,000 to nearly $60,000 during the five months to February 2021.
• The balance held by whale entities rose in tandem with the price during the bull run, hitting a record high of 4.542 million on Feb. 8.

Yellow line represents supply held by whale entities, black line represents bitcoin's price
Source: Glassnode

• Whales became sellers in the subsequent months, taking the wind out of the bull run, and by early May, their bitcoin stash had dropped by 8% to 4.17 million BTC.
• Bitcoin mostly remained coiled in the range of $50,000 to $60,000 during that period, barring a brief spike to a record high of $64,801 in mid-April.
• The price action highlighted the inability of smaller investors to do the heavy lifting and signaled the potential for a notable price correction. Bitcoin fell by 35% in May, hitting lows near $30,000, and dipped further to $29,031 in June, per CoinDesk 20 data.
• The latest uptick in the whale balance suggests the bottom may have been reached.
• The cryptocurrency is trading near $35,500 at press time, representing a 2.3% gain on the day.