The activity of Bitcoin whales signals a warning

Whales are regaining control of activity on the exchange. The 30-day Moving Average of the Whale Ratio on the exchange has surged to 0.47 — the highest level in seven months — indicating that nearly half of the BTC currently deposited on the exchange comes from the largest transactions.

History shows that spikes in whale activity often signal major market tops, as holders with large quantities tend to transfer funds in preparation for selling. When retail investor participation gradually decreases and the influence of whales increases, the market may enter a distribution phase, raising the risk of short-term corrections.

Is Bitcoin about to drop deeper?

The price of Bitcoin has recently surpassed the $111,000 mark, setting a new all-time high. However, profit-taking activities from whales and the risk of a macroeconomic recession have caused BTC to drop by more than 5%, currently trading at $105,298.

Data from CryptoQuant shows that the Whale Ratio on the exchange has increased significantly, which is a signal to be cautious. Historically, when this ratio exceeds 0.5 — meaning that whales account for a large portion of BTC deposited on the exchange — a price peak usually follows shortly thereafter.

The whale ratio on the exchange measures the amount of Bitcoin flowing into exchanges from the top 10 largest transactions. Specifically, if the 30-day moving average reaches 0.47, it means that nearly half of the BTC deposited on the exchange comes from whale transactions.

This model has appeared in previous market cycles, such as in mid-2022 and late 2024, when whale activity surged coinciding with strong market corrections.

The meaning of this is: BTC holders with large amounts often transfer money to the exchange to prepare for selling, and this phenomenon usually occurs right at or near local price peaks.

Bitcoin: Whale ratio on the exchange | Source: CryptoQuantConversely, periods when the whale ratio drops below 0.35 often mark accumulation phases or the early stages of a price increase, when the market is primarily driven by retail investors.

A clear example is in mid-2023, when this rate hit a low and Bitcoin began to increase steadily thereafter.

"There is currently an increasing dominance of large investors in trading activity on the exchange. This strong upward trend reflects the pattern previously seen in the Whale Ratio on the exchange during the price surge of Bitcoin at the end of 2023 and the beginning of 2024," said CryptoQuant analyst JA Maartunn.

The current surge in the 30-day Moving Average of this ratio further strengthens the view that whales are becoming more active in their activities on the exchange.

If history repeats itself, the whales selling off in large volumes could trigger a correction or increase volatility.

Although the price of Bitcoin is currently maintaining a high level, this change in behavior suggests that the market may be shifting from an accumulation phase to a distribution phase, increasing the risk of forming a short-term peak or an upcoming correction.

Minh Anh