Unveiling the Strategies of Crypto Whales as Bitcoin Prices Decline: Bitfinex’s Premium and TWAP Buying Trends

Big crypto players, known as whales due to their substantial token holdings, seem to be capitalizing on the declining prices of bitcoin [BTC], taking advantage of the cryptocurrency’s recent drop following the introduction of U.S. spot ETFs.

Since the commencement of trading for spot ETFs in the U.S. on January 11, bitcoin has witnessed a significant 19% decline, settling at $39,770, according to CoinDesk data.

In response to this downturn, crypto whales have been actively scouring for discounted bitcoin on Bitfinex, a prominent exchange ranking among the top 10 in terms of trading volumes. Bitfinex whales are renowned for causing ripples in the market.

TradingView data reveals that over the weekend, bitcoin was trading at a $100 premium on Bitfinex compared to the global average price. As of the latest update, the premium still stands at around $70, notably higher than other major exchanges such as Coinbase and Binance.

A pseudonymous market analyst and trader known as Byzantine General noted on X Sunday, “Someone on Bitfinex has been nonstop TWAP buying $BTC for 3 days straight now, which is why Bitfinex has been trading at a fat premium. About $50m spot accumulated so far is my estimate.”

This continuous TWAP buying strategy, or trade-weighted average price, involves an algorithmic approach to splitting up significant orders over time. This helps traders minimize slippage, the difference between the requested price of a trading order and the actual execution price.

The trend of TWAP buying persisted into Tuesday, driven by sales from the FTX bankruptcy estate and outflows from the Grayscale Bitcoin Trust (GBTC), resulting in prices falling below $39,000 for the first time since early December.

The demand during this dip is also reflected in the renewed interest in bullish leveraged bets on Bitfinex. The chart indicates that the number of open BTC/USD longs, signifying bullish leveraged bets, surged by nearly 8%, reaching over 73,000 contracts within a week.


Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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