Large investors took advantage of the collapse in bitcoin prices last week to build up their positions. The whales bought 77,000 BTC, according to the data analysis company Chainalysis.
On May 19, the first cryptocurrency failed the support level around $40,000, dragging the rest of the market down with it. At the moment, the price of digital gold touched the $30,000 mark, but then corrected above $36,000.
According to Chainalysis senior economist Philip Gradwell, during this period, 75% of transfers went to cryptocurrency exchanges from other trading platforms. This indicates the activity of market makers and traders engaged in arbitrage. Miners accounted for only 1% of the revenue.
The collapse of the market led to the fact that the exchanges received 1.2 million BTC with losses from 5% to 25% compared to the rate at the time of their transfer to the wallets of the holders. Investors also sold 120,000 BTC with losses of 25% or more.
Gradwell stressed that the total number of bitcoins sold at a loss was lower than at the end of 2017 or mid-March 2020.
On the Ethereum network, by contrast, the number of unprofitable transactions has reached a record high. The holders of the asset sold 22.6 million ETH with a loss of 5% to 25%.
In dollar terms, investors lost at least $3.2 billion on bitcoin. Gradwell noted that this figure is lower for Ethereum, but the overall picture is similar.
Analysts have determined that the average cost of buying bitcoin from investors who entered the market over the past year was $37,800. During the week, the price of the first cryptocurrency was near this level, consolidating higher by the end of the week.
According to Gradwell, if the price was fixed below the average value of the investment, it could be assumed that bitcoin holders doubt the fair value of the asset.
For Ethereum, the average purchase price was $1,700.
Earlier, the co-founder of the venture capital company Morgan Creek Digital, Anthony Pompliano, concluded that during the fall of the market, owners of bitcoin addresses with a balance of 10,000 to 100,000 BTC increased their positions by 122,588 BTC.