Bitcoin Price Set to Consolidate or Retrace Even Further in 2023: Analysis

Bitcoin Price Set to Consolidate or Retrace Even Further in 2023: Analysis

The price of Bitcoin suffered a massive collapse in 2022, falling by more than 50% in 12 months. However, crypto analysis platform Santiment believes there will be more bad news in the new year.

The company based its rather bearish forecast on the activity of BTC whales.

BTC whales are net sellers

Santiment began its 2023 prediction analysis by highlighting the importance of BTC whales’ behavior on the asset’s price movements. This is somewhat to be expected, as these types of investors – who hold between 1,000 and 100,000 BTC in a single wallet – could have more influence if they decide to sell or buy in bulk.

They were fairly active on the buying front during the 2021 bull market, but most have changed their strategy in the completely different environment of 2022. The analytical resource confirmed this, claiming that Bitcoin whales have become “net sellers” recently, “and the price has followed suit.”

“With confidence, we can predict sideways movements or even lower prices for BTC over the next 6-12 months.” – Said Santiment.

The holdings of Bitcoin whales. Santiment

The analysis added that BTC bottoms are typically found when whale activity has significantly decreased. However, this is currently not the case as there are currently over 10,000 daily transactions from such investors, while the number has fallen to between 1,200 and 2,500 during previous lows.

“That may mean we have to wait for the average to fall further before we can conclude that even the big ones are giving up.”

Santiment predicted that a price drop to as low as $12,200 is not out of the question, as there are two notable volume gaps between that level and $14,600 that whales could pay attention to.

Retail investors are different

There is a big difference between what retail and whales have done during previous bear cycles and this one. Previously, the former became more easily frightened and sold their bags, while the latter went on an accumulation spree.

However, the 2022 bear market has seen a completely different landscape. Whales, as mentioned above, have been selling their assets, while retail investors (holding between 0.1 and 10 BTC) have refused to sell and have actually continued to buy.

This means their cumulative holdings reached an all-time high of 15.9% of the total available Bitcoin supply in mid-OctoberCryptoPotatoreported at that time.

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