Bitcoin blasted from $10,000 to just under $20,000 in just a few months, sans any significant correction. And while sellers have been unable to shift the bullish momentum thus far, increased whale activity has one top crypto quant analyst warning investors not to buy the “dip.”
Here’s why the opinion is so “unpopular,” along with the data that has the professional whale watcher skeptical about further upside in the first-ever cryptocurrency – for now.
Unpopular Opinion: “Don’t Buy The $&%#ing Dip”
During the 2017 crypto bull run, making money was fairly easy according to those that lived it. Simply hold on for dear life, and when the opportunity presents itself, be ready with fresh fiat to buy the dip.
Not only does the strategy avoid FOMOing into tops, but it ensures a greater chance of successfully catching a life-changing leveraged long.
With Bitcoin setting a new all-time high, FOMO back in the market, most market participants have concluded it is dip-buying season once again. The ferocity in which each minor correction has been bought up shows this process in action. The asset has corrected no more than roughly 20% in all of 2020, post-Black Thursday.
But Ki Young Ju, CEO of CryptoQuant.com, is issuing a warning starkly in contrast to the hive mind’s expectations, and that’s “don’t buy the $&%#ing dip.”
Whales are preventing the rally from continuing | Source: BTCUSD on TradingView.com
Crypto Cetology: What The Study Of Bitcoin Whales Tells Us
Quantitative analysis in traditional markets looks at profit margins, opex, etc. In cryptocurrencies, instead, the statistical data focuses on blockchain network health, wallet activity, and other unorthodox metrics.
According to Wikipedia, cetology is the study of whales (and dolphins and other porpoises) to better understand their “evolution, distribution, morphology, behavior, community dynamics, and other topics.”
After comparing the two definitions, crypto fundamental analysis could more akin to the actual study of whales, versus other assets like stocks.
Quant analysis looks closely at the “distribution” of Bitcoin whales, and how many BTC they have in their wallets. Analysts commonly use wallet-size to rank whales in buckets of 1000+ BTC, 100+ BTC, etc.
Whale community behavior in action, according to BTC exchange inflows | Source: CryptoQuant.com
Quants like Ki Young Ju utilize transparent blockchain data to monitor whale “behavior” and “community dynamics.” And currently, the Bitcoin whale community is exhibiting behaviors that indicate they are either now selling, or preparing to sell down the current rally, prompting him to offer the “unpopular opinion.”