Whales are building their positions on derivatives

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On-chain data shows whales are sending their Bitcoin from spot exchanges to derivatives, indicating that they are strengthening their positions.

Bitcoin whales strengthen their positions on derivatives exchanges

As a CryptoQuant article pointed out, Bitcoin whales appear to be moving their crypto from cash to derivative exchanges.

The relevant indicator here is the “average flow of all exchanges to derivative exchanges”, which indicates the total amount of coins transferred from spot exchanges to derivative exchanges.

When the value of this metric shows continuous high values, it means that a large chunk of Bitcoin is steadily moved to these derivative exchanges, which may suggest that whale activity has taken place.

Low values ​​would imply that few coins move in this direction, and could either remain stationary, or rather go in the opposite direction: derivatives to the spot.

Now here is a chart that shows the trend this indicator has been following over the past two years:

BTC, All Trading To Derivatives, Signifies Relative To Price | Source: CryptoQuant

The graph above has different regions marked depending on whether the whales seemed to be piling up at that time or not.

Related reading | Despite the new ATH, Bitcoin’s exchange reserves continue to decline

The green regions were when the price was moving mostly sideways and the indicator was causing the whales to send a lot of BTC to the derivatives.

Following these periods of accumulation, the price had always shown a jump during the period of the chart above.

However, once the value of the indicator got very low, the price of BTC appeared to have peaked, after which its value fell.

Related reading | Lucky buyers pocket $ 8,000 worth of Bitcoin in early morning lightning crash

Now, as the graph shows, the current trend makes it look like the whales have just started another phase of accumulation. This could turn out to be bullish for the future price.

BTC price

As of this writing, the price of Bitcoin is floating around $ 61.5,000, up 2.7% over the past seven days. Over the past month, the crypto has racked up 42% gains.

The chart below shows the coin’s price trend over the past five days:

BTC price appears to be plunging rapidly | Source: BTCUSD on TradingView

After setting a new all-time high (ATH) of $ 67,000, Bitcoin has fallen sharply over the past two days. It is not known at this time what trajectory the coin might follow next, but if the average spot flux to derivatives is anything to consider, the whales appear to be piling up. This could help the price to rebound and set it up to hit higher ATHs.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

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