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It’s always hard to guess what direction the Bitcoin whales are heading next. Despite institutions dumping Bitcoin in late December –spurred on by its peak high of $106,000 – they’re back to buying it in January, causing a number of investors to scratch their heads. As ever in the cryptocurrency-verse, the question is whether to follow or hang back. So if you’re an investor, what exactly should you do?
The Movement of the Whales
As just mentioned, Bitcoin reached an all time high back in December, so it was no surprise that the Bitcoin whales would start shipping off their BTC. What is a surprise is how quickly they have turned around to put more BTC into their portfolio, with the Bitcoin price today having reeled back to around $96,000.
As of January 2025, large Bitcoin holders are back to buying huge amounts of the cryptocurrency, with more than 34,000 BTC – worth around $3.2 billion – being accumulated over the last few weeks.
According to blockchain expert, Caue Oliveira, the buyup came after crypto wallets holding between 1,000 to 10,000 BTC sold off more than 79,000 BTC in the last week of December, spurred on by the new peak and the US Federal Reserve interest rate cut, which ended up generating a 15% correction. Crypto whales took advantage of that consolidation, making big trades that were ‘broken down into multiple smaller orders’.
What the Big Buy Means
As the US jobs and economic data dashed hopes of further interest rate cuts – and the price of Bitcoin falling below $100,000 – the Bitcoin whales returned to buy, and this could mean a number of things.
For starters, the fact that whales are re-entering the BTC market after a brief sell-off suggests confidence in Bitcoin’s 2025 potential. Despite the correction, the rapid accumulation shows that these large holders view the dip as a buying opportunity rather than a sign of a prolonged downturn, and this falls in line with many of the expert predictions that BTC could experience another rally later this year – earlier this month, analysts predicted that a proposed US Bitcoin reserve could push the cryptocurrency to as much as $400,000.
As well as this, the big buy seems set to drive some short-term volatility. This is why whale movement is so important for investors to follow, as large buy and sell orders can easily cause some sharp price shifts in the market.
Should You Follow the Whales?
This brings us on to the most important point: if the crypto whales are surging toward a coin, should you follow them? As ever in the world of crypto, the answer to this question is multi-faceted. On the one hand, increased volatility can provide heightened opportunities for investors. When whales accumulate, they often signal a potential upward trend in the price, so following their moves can place you in a prime position to benefit from the momentum they generate – particularly if their activity attracts broader market interest, which this January buy is certainly doing.
On the other hand, with heightened opportunities comes heightened risk. For instance, while whales driving up prices can be good for some, it can leave smaller investors exposed, especially if they accumulate and then sell off quickly at higher levels. It’s also worth noting that whales are not necessarily experts. Sometimes large purchases are speculative or designed to create artificial demand, which is even more of an issue when they create extra volatility.
How to React to Whale Movement
As mentioned previously, it doesn’t seem like ‘artificial demand’ is the name of the game in this case. Bitcoin has every opportunity to experience a bullish 2025, especially if the ETFs continue to be successful, and the new US president holds to his promise of the US being a new crypto haven.
But that still doesn’t mean you should automatically follow them. A market overly reliant on whale activity can quickly become unstable, and if their interest shifts or they decide to offload their holdings, it can result in significant price crashes – something that will affect you if you’re one of the suckerfish.
With this in mind, it’s always important to do your own research, investigating BTC’s fundamentals, the market sentiment, and any upcoming developments. Because it’s BTC – the most expensive cryptocurrency in the world – it’s also important to start small, allocating only a portion of your portfolio to the trade to minimise risk.
As well as this, you should set clear goals about your exit strategy. Know whether you’re aiming for short-term gains or long-term holdings, and make sure to stick to your plan, even if the whales do not stick to theirs.
Lastly, even if you follow whale activity, make sure that you diversify, curating a portfolio that includes a number of assets rather than just one. This will allow you to spread the risk of your investments, ensuring that, while one coin price might shift dramatically, losing out doesn’t mean you’re out of the market entirely.
Following whale activity can be a viable strategy, but it’s important to remember that it comes with risks, and success in the crypto market requires a balance of informed decision-making, strategic planning, and investment discipline.