The Bitcoin price took a surprising dip last week. Despite increased whale activity, it has now begun a steady increase and has held steady around the $116,000 mark.
In the last two weeks, around $4 billion has moved into crypto wallets owned by whales. These are large wallets that hold vast amounts of cryptocurrency for a prolonged period of time. Generally, when they sell off or move large amounts, it can spook markets. However, around 1,000 BTC flowed into them during the last two weeks of the US’s second financial quarter.
Increase in Whale Activity
Exchange Binance noted that last week, BTC slipped 1% and ETH fell 4.1%, while gold outperformed with a 3.9% gain, reaching a new all-time high. The S&P 500 rose slightly by 0.3%, while the ETH/BTC ratio dropped below 0.039. In India, this showed as a Bitcoin price in INR rating of 9,818,376. However, it has since begun an upward trajectory, and at the time of writing, it is around the 10,231,207 level.
However, it is not just Bitcoin that whales are accumulating. One wallet changed 2,000 BTC into 48,942 ETH. This is part of a wider movement, whereby altcoins are now falling under the gaze of many looking for better yielding investment opportunities now Bitcoin is losing its volatility. Binance noted that in August, Bitcoin dominance dropped to 57.3% while Ethereum rose to 14.2%, with corporate treasuries holding 4.44M ETH (3.67% of supply).
One whale who sold $4 billion of Bitcoin holdings last month and changed them for ETH has now begun to sell again. As Bitcoin crossed $4 billion for the first time in almost a month, two wallets tied to an address dumped BTC they had held for eight years. This was to the value of 1,176 BTC and was equivalent to around $136 million.
Generally, when whales do this, it pushes down prices. In this instance, this has not been the case. In fact, BTC has regained some of its dominance since, with the ETH to BTC ratio currently standing at 0.0401. This is a gain of 6% over the last month.
How Could a Rate Cut Impact Bitcoin?
One of the reasons Bitcoin may be bucking the trends usually set by whale activity is the amount of money going into Spot Bitcoin ETF products in the US. This is generally a barometer of confidence coming from the more traditional financial sector, with inflows around the value of $2.3 billion last week alone. In one day (Sep 10th), Bitcoin ETF products had $757 million inflows alone, a third day of straight gains. Ethereum ETF products also recorded $172m.
Many are awaiting a rate cut by the Fed, with some viewing it almost as a certainty. The expectation is that this will push people towards riskier assets, of which Bitcoin is one. This would hedge up the price and last week wallets in the $113,000 – $114,000 started to accumulate further, possibly in anticipation. Cuts from the Fed are by no means a done deal though. If they don’t cut and possibly even raise rates, then it could cause real yields to rise and create more adjustment for the BTC price.
That said, Binance has noted that historical analysis of the 2019 and 2024 Fed rate cut cycles shows no consistent positive impact on Bitcoin. Instead, in its weekly report, it highlighted how price reactions have followed a “buy the rumour, sell the news” pattern and displayed no clear trend. This is proven by correlation coefficients between rate cut expectations and Bitcoin, mostly fluctuating between -0.5 and +0.5.
Last week, the US Producer Price Index showed inflation in the US was cooling slightly. This immediately pushed up riskier assets, and as Bitcoin hit $113,000. The entire cryptocurrency market increased, from 1.5% to $ 4.06 trillion.
What Are the Current Key Bitcoin Price Levels?
There are several key levels investors must watch. The first is the resistance band between $116,000-$121,000. So far, Bitcoin has briefly risen above the $116,000 mark, only to dip back down. As spot demand and ETF inflows have increased, this has yet to be tested again, and if it can sustain above this level, it could reach $121,000 and continue upwards. This is a major supply zone, which, if held, could lead to a sustained recovery.
On the low end, the levels between $110,000 and $107,200 are key. Many traders are pinning this as the daily bearish breaker. This summer showed that $100,700 was a crucial support zone, and it could be again should prices begin to head downward.
Ultimately, it is not only whales but also major companies that are adding Bitcoin to their portfolios. Price losses are unlikely to be significant and are unlikely to be retraced within a few weeks. However, it will require further news and lightening of global economic conditions to rectify this.
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