This bullish mix has finally formed for Bitcoin, will it move higher? cryptoforbs

On-chain data shows that a bullish formation has just formed for Bitcoin, which could indicate that a rally could be in the future for the asset.

Sharks and whales are collecting both Bitcoin and Tether now

According to data from the on-chain analytics company SantimentBTC and USDT sharks and whales have been accumulating lately. The metric of interest here is the “bid distribution,” which tracks the total amount of a given asset held by different shareholder groups.

In the present topic, sharks and whales are the entities of interest. For Bitcoin, the combined supply of these assets can be defined as a range of 10 to 10,000 BTC, while for Tether, it is generally between 100,000 and 10 million USD.

Sharks and whales are influential entities in the sector due to their holdings, but their role varies between whether they own the volatile BTC or the stablecoin USDT.

The chart below shows how sharks and whales’ supplies of the two cryptocurrencies have changed over the past few months:

Both of these metrics appear to have registered an increase during the past few days | Source: Santiment on X

The chart shows that Bitcoin sharks and whales have engaged in some accumulation recently, taking their supply to 13.03 million Bitcoin, a new record for the year.

Interestingly, while this accumulation occurred, Tether sharks and whales also expanded their holdings. The value of the measure, in this case, reached a six-week high of US$15.03 billion.

The significance of the trend in the supply of Bitcoin sharks and whales may seem straightforward: these massive entities are buying now, so it must be bullish for the price. But what about the pattern shown by the USDT group?

In general, an investor can buy a stablecoin like USDT to avoid the volatility of assets like Bitcoin. Once these holders feel that prices are right to jump back to the volatile side of the sector, they exchange their pegged fiat currencies for the desired currency.

This shift can naturally provide buying pressure on any cryptocurrency that is switched to. For this reason, one way to look at stablecoin supply is to measure the potential purchasing power available for Bitcoin and other assets in the market.

Thus, the latest accumulation of Tether may indicate that sharks and whales have increased their purchasing power. Sometimes, spikes in this indicator come at the expense of the corresponding Bitcoin metric, as these holders shift their reserves. While purchasing power rises in the future in such a scenario, it has only come at the expense of the Bitcoin sell-off.

However, in the current case, both of these indicators rose at the same time, meaning that not only were sharks and whales involved in some Bitcoin buying, but also capital reserves that these large holders of the asset may have originally deployed in the market. The form of Tether also rose. “This is generally a bullish combination,” Santiment explains.

Bitcoin price

Bitcoin earlier rose above the $27,000 level, but the asset has retreated in the past few hours as it is now trading around the $26,700 level.

BTC has already retraced some of its recovery | Source: BTCUSD on TradingView