CryptoQuant CEO Ki Newborn-Ju today highlighted significant similarities in Bitcoin market behavior between now and mid-2020, a period characterized by stagnant prices but high on-chain activity. Newborn-Ju’s observations were illustrated in two key charts and shared in a post on X, drawing parallels that suggest a significant share of high-volume trading, potentially outside public exchange networks.

The first chart, showing data through 2020, shows Bitcoin’s price along with the realized cap for modern whales – a metric that tracks the aggregate value at which newly acquired Bitcoin has recently been moved by gigantic investors. This is another form of market capitalization that values ​​each UTXO at the price at which it last changed hands, rather than at its current market price. This indicator reflects the actual realized value of all coins on the network, not their current market value.

This value skyrocketed around mid-2020, right when the price of Bitcoin, as in recent months, fell out of boredom, remaining constantly around $10,000. According to Newborn-Ju, this period was characterized by high activity in the transaction chain, which later analysis showed included over-the-counter (OTC) transactions between institutional players.

In the second chart, covering the year 2024, a similar pattern emerges with an even more pronounced boost in the realized limit for modern whales, even though the Bitcoin price has been moving sideways for almost 100 days. The chart shows a significant boost in modern whale wallets of around $1 billion per day – a term that typically refers to addresses holding gigantic amounts of Bitcoin, often associated with institutional investors or large-cap individual investors.

What does this mean for the price of Bitcoin

Ki Newborn-Ju expanded on these observations: “Same sentiment on Bitcoin as in mid-2020. At that time, BTC was hovering around 10,000. dollars for 6 months with high on-chain activity, which were later revealed as OTC transactions. Currently, despite low price volatility, online activity remains high, with $1 billion being added to new whale wallets every day, which likely means childcare.”

He then referenced a September 2020 tweet that corroborated his analysis, noting that “the number of BTC transferred has reached its highest level of the year and these TX are not from exchanges. The funds flow rate on all exchanges reached the lowest level of the year. Something happens. Probably OTC offers.

This comparison, and the continued high level of realized catch quota for modern whales, suggests that an accumulation phase is underway among gigantic investors, reminiscent of the activity seen in mid-2020. Such movements are generally imperceptible on classic cryptocurrency exchanges and indicate mighty institutional interest, which may be a precursor significant market movements. Following Newborn-Ju’s tweet, BTC price increased by 480% from September 2020 to November 2021.

Time will tell whether a similar move will occur in the Bitcoin price, but the continued rise in Bitcoin holdings among modern whales, along with persistent price levels, indicates a potential boost in pressure beneath the apparent placid of the market surface. As observed in the past, such conditions can lead to significant price movements once accumulated Bitcoin begins to impact the broader market through increased liquidity or renewed trading interest.

At the time of publication, the price of BTC was $68,271.

Featured image created with DALL·E, chart from TradingView.com