While technical analysis offers insight into crypto asset performance and market sentiment, “buying the dip” to a specified “bottom” is not always as easy as many people make it out to be.
In a new release report titled “Whale Watching during the Dip: Where’s the Accumulation Happening?”, noted analytics platform Santiment,
“Buy low tones, sell high tones easily in practice. But in a wobbly and volatile market like cryptocurrency, defining what “highs” and “lows” really are is nearly impossible, and always a relative science instead of being precise.
The big boys always buy AAVE
According to the report, Santiment found that AAV tokens ranked first among the top three crypto assets whales have accumulated since the onset of the general crypto market downturn. Furthermore, given the index of AAVE addresses held since the beginning of the year, Santiment asserts,
“We just saw a huge spike in accumulation from 10k to 1m addresses, which is 47.7% of supply holders now. Prior to June 20, they held 42.3% of the supply. As you can imagine, a sudden one-day accumulation of more than 5% in supply from these millionaire holders is a welcome sight for future price prospects.
While it should be noted that whales hold over 45% of the AAVE tokens in circulation, an examination of the index of previously inactive AAVE tokens that have now changed address revealed something interesting.
Over the past few days, there has been a sudden increase in the number of previously inactive AAVE tokens that have now changed address. This indicated that addresses that held AAVE tokens at the start of the year were beginning to let go, with the price of the tokens seeing a drop of more than 70% in the last 180 days.
Additionally, as Santiment noted in his report, it is true that “in a speculative market like crypto, major holders always dictate where prices move next.” However, the increase in whale stocks for AAVE tokens had little impact on the price.
A review of the year-to-date exchange flow balance showed that more AAVE tokens left exchanges than entered. At each point where this metric showed a negative value, the AAVE token decreased in price.
Additionally, at press time, the FX flow balance stood at -18.8k. This meant that although the price was up 8% in the past 24 hours, a retracement was imminent.
Additionally, despite whales holding a significant amount of AAVE tokens, data from Santiment revealed that, on a 7-day average, the index of whale transaction counts has been declining since April.
For transactions above $100,000, the number of whale transactions recorded highs early in the year. However, that dropped in mid-March. A correction was spotted at the end of March but was only temporary due to the April bloodbath.
Since then, it has recorded only low numbers. At press time, this metric stood at 81. For deals above $1 million, a similar progression was tracked. At the time of this writing, that amounted to six.
According to the report, the other two crypto-assets that have been widely accumulated are SAND and LRC. Oddly enough, ADA, YFI, and DOGE were spotted as the top assets that whales shun.