Whale Activity Indicates Trend Reversal – Chung’s Weekly Digest (2/06)

Whales aggressively buying in could be signaling a market cycle bottom as Bitcoin continues to march North.

Follow the Whales

The crypto market woke up from its winter slumber when Bitcoin ($BTC) reclaimed $41k in convincing fashion. In our previous digestWill Clemente tweeted on January 28 that on-chain data shows whales with addresses holding more than 1,000 Bitcoins are accumulating. 

Source: Bitcoin broke out from a 70-day descending channel followed by strong volume indicative of a trend reversal

On Friday, Bitcoin and Ethereum ($ETH) staged a strong surge upwards breaking its resistance and brought about a renewed optimism into the market. Two bullish scenarios might play out in the next few days. First, a dip to the previous resistance of $38k and bouncing off its previous resistance turned support or secondly, a prolonged consolidation at $41k. The consolidation at $41k will create a new floor of resistance above $41k. 

Source: Bitcoin’s Relative Strength Index (RSI) has also flipped bullish

The last time the whales were accumulating was in mid August last year. Bitcoin was trading at $44k and reached its all-time high in early November. The same scenario seems to be unfolding. 

Source: On-chain analyst Benjamin Cowen is optimistic that this breakout is not a fakeout. 

Weekly Recap

FTX exchange is valued at a massive $32 billion after its Series C funding round. 

Binance eyes regional development in Russia and Ukraine. 

Ark Invest predicts a $1 million Bitcoin by 2030. 

Popular GameFi, Thetan Arena features a new Hero Spotlight series on YouTube. 

Top DEX on BSC, PancakeSwap completes its 14th Community Farm Auction

Binance’s Secure Asset Fund for Users reaches $1 billion.  

India finally regulates crypto but imposes a 30% levy on cryptocurrency income and profits. 

El Salvador ignores IMF’s recommendation to drop Bitcoin as its legal tender. 

Grayscale partners Bloomberg for its first ETF. 

Top GameFi projects are on Binance Smart Chain (BSC).

Joshua Jarrett rejects IRS’s offer to settle and demands clarity through judicial pronouncement. 

Binance alerts users on phishing scams. 

PancakeSwap implements changes to its lottery feature. 

Market Sentiment


Bitcoin appears to be still on track for the second leg of its bull cycle. 

Market observers are still cautious that Bitcoin’s recent price action may be a fakeout. 

Market sentiment has improved tremendously but retail and institutional interests are still not kicking in. 

Grayscale Bitcoin Trust is still at trading at a 27% discount, indicating that institutional investors are still reluctant to be exposed to Bitcoin. 


Coins to Watch

Terra ($LUNA) is the backbone to decentralized algorithmic stablecoin ($UST). $LUNA is burnt to mint $UST. Adoption of the top decentralized stablecoin is the driving factor that will provide the rocket fuel to $LUNA to retest its previous high. 

Solana ($SOL) is one of the main beneficiaries to Ethereum’s problems with scalability, speed and fees. On-chain metrics show more users are choosing Solana’s network as their preferred layer-1 solution. 

Thetan Arena ($THG) one of the top GameFi projects with a thriving community has capitulated and is now trading at a massive bargain. Merely climbing to its previous all-time high is a 9x gain from its current price.  

Trader Joe ($JOE) is the top Decentralized Exchange (DEX) on the Avalanche blockchain. Avalanche will continue to grow and Trader Joe will be one of the main beneficiaries from the increased activities on Avalanche. 

Serum ($SRM) is the DEX on Solana. If Solana is going to be the preferred layer-1 solution, Serum will start seeing a substantial increase in the number of users on its platform. 

Crypto Social Media Influencers 

Retail investors learning about cryptocurrencies for the first time would likely stumble upon YouTube channels or Tik Tok accounts with clickbait titles that sounds like, ‘The 100x Undiscovered Crypto Gem’ or ‘Emergency, the FED Has Just Made an Unexpected Announcement!’. 

Neither are these contents created to educate nor to disseminate reliable information. Instead, it works on two of human’s greatest weaknesses which is greed and fear. Making money in the crypto market takes the same amount of effort as making money in the traditional market. 

Source: UpOnlyTV host, Cobie calling out an influencer for making untruthful claims

An influencer can make 4 or 5 predictions in a single posting and the likelihood of at least 1 turning out to be correct does not require extraordinary skills or knowledge. Putting the entire scenario in perspective, it is definitely not a situation of ‘exactly as predicted’. 

However, there are some channels that provide educational contents with deep dive into various projects with proper disclosures. These content creators deserve the attention because of the effort, research and analysis that were carried out. Two channels that provide good market insights and education for newcomers are The Coin Bureau and CTO Larrsson

The crypto market should not be seen as a get rich quick scheme and should be treated like any other investment. Doing your own research is still the best way to navigate this complex ecosystem. 

Source : bsc.news

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