Data Analysis: “Whales” Take Advantage of 77,000 Bitcoins in This Plunge

The plunge could not have been a better opportunity for the whales to bottom out.

According to blockchain analytics firm Chainalysis, large investors took advantage of bitcoin’s price plunge to bottom more coins last week.

Philip Gradwell, chief economist at Chainalysis, wrote in his latest market intelligence report that “investment whales” bought 77,000 bitcoins last week, which are now worth just over $3 billion. This is based on Chainalysis’ monitoring of on-chain data.

Last week, the price of bitcoin plummeted from $49,000 to a low of $30,000, clearing $3.3 billion in contracts in one hour.

This market intelligence report is consistent with The Block’s report that hedge funds and asset managers are bottoming out, especially as bitcoin falls between $30,000 and $35,000.

The plunge has led to massive on-chain losses
According to a report by Chainalysis, the price plunge led to massive bitcoin losses and on-chain transfers. Gradwell said the 1.2 million bitcoins transferred saw losses of 5-25%, while another 120,000 bitcoins transferred saw losses of 25% or worse.

He said, “But the smaller number of bitcoins lost this time compared to the price crashes of late 2017 and mid-March 2020 suggests that last week was not the biggest loss for position holders in bitcoin history.”

Data Analysis: "Whales" Take Advantage of 77,000 Bitcoins in This Plunge

However, these losses increase when measured in U.S. dollars. The report notes that holders sold $3.2 billion at a loss last week on coins that holders had acquired only four to 13 weeks earlier. In some ways, it was “the worst week ever for bitcoin investors.

It was a similar story with ethereum. Last week witnessed the largest number of ethereum losses ever. The report says that 22.6 million ETH were sent in transfers and that these coins lost 5-25%. On the other hand, Gradwell noted that “while people have suffered losses on Ether, in percentage terms, the losses are not huge.”

Returning to the average purchase price
According to this report, the price of bitcoin has now returned to a much higher level than the average purchase price last year. Gradwell noted that the average purchase price last year was $37,800, a figure that Bitcoin fell below at one point, but recently broke back above.

Data Analysis: "Whales" Take Advantage of 77,000 Bitcoins in This Plunge

Historically, the economist said, the prices of bitcoin and ethereum usually revert back to their cost price and there is usually a bottom, except for the 2018 cryptocurrency winter.

For ethereum, the average purchase price last year was $1,700, but it did not fall to that level during this crash. At press time, Ether was at $2,540, $840 above that price.

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