Bitcoin’s Sending Mixed Signals: Should You Buy, Sell, or Hold?

• Bitcoin shows signs of optimism with potential buying opportunities amid extreme retail fear.
• Whales are accumulating, with a rise in USDT holdings indicating fresh capital is entering the market.
• Meanwhile, a rise in Bitcoin supply on exchanges signals caution.

The Bitcoin market is sending mixed signals, leaving investors wondering whether to expect a rebound or further decline. 

On the Thinking Crypto podcast , Tony Edward and Brian Quinlivan from Santiment recently discussed the current, complex landscape.

Bullish Signs: Whale Accumulation and Stablecoin Inflows

While Quinlivan acknowledged that the past few months have been challenging for Bitcoin and altcoins, he noted the last couple of days have shown signs of optimism.

However, with sentiment shifting back toward bullishness, there is a risk of a bull trap, where prices may stagnate or even dip before finding more stability. Quinlivan advised market participants to exercise caution to avoid getting it wrong while whales and sharks drive the market’s true direction.

Related: Bitcoin Whales Go On a Buying Spree: 28,000 BTC Moved Into ‘Accumulation’

Notably, between February 20th and March 3rd, wallets holding 10+ BTC sold over 11,000 BTC, causing a sharp price drop. 

However, since then, those same wallets have bought back a substantial portion of those coins. This suggests that whales might be accumulating again, which typically points to positive market conditions. This suggests that whales might be accumulating again – a historically positive sign for the market.

Quinlivan also provided data on the stablecoin holdings of whales. Specifically, he tracked wallets between $100K and $10M in USDT stablecoins, often considered “smart money.” He noted that their Tether holdings have risen from 21% to 21.6% since mid-February. This indicates fresh capital is entering the market. USDC holdings have also increased slightly.

These movements suggest that despite fears of a bearish outlook, there is fresh capital entering the crypto ecosystem.

Bearish Signal: Rising Bitcoin Supply on Exchanges

But there’s a counter-argument. While whale activity and stablecoin trends indicate positive market behavior, Bitcoin supply on exchanges tells a more cautious tale.

Since early February, over 35,000 BTC have moved onto exchanges, a trend that could indicate traders are preparing to sell. If this increase in exchange balances continues, it could create sell pressure that would slow or reverse the rally.

Related: Bitcoin Exchange Holdings Plummet: 200K BTC Withdrawn in 60 Days

Quinlivan pointed out that while the situation isn’t alarming yet, this trend is worth monitoring closely, particularly as we approach potential macroeconomic shifts in the coming months.