Large Bitcoin investors on Bitfinex are once again drawing market attention. Analysts tracking data on leveraged positions indicate that margin-leveraged Bitcoin long positions held by 'whales' have risen sharply and are approaching levels seen in March 2024.
A new accumulation phase occurs as overall market participation declines, raising questions about what these capital-strong traders are signaling.
What does the record high number of whale long positions on Bitfinex signify?
According to on-chain analyst James Van Straten, Bitfinex whales have continued to aggressively increase their positions.
"Bitfinex whale continues to increase its margin-based Bitcoin long position, approaching peaks from March 2024, up 36% over the last three months," he wrote on X (Twitter).
Data highlights a steady accumulation trend since September, where long positions have been increased while prices have been weak and not during price rallies.
Bitfinex also appeared to identify activity, highlighting that large and experienced traders can take decisive positions while smaller participants reduce their risk.
This behavioral difference is particularly significant. While Bitcoin's price has been volatile in recent weeks, whale accumulation has intensified.
Historically, these Bitfinex long positions have been associated with traders who tactically use leverage. They often increase positions during dips instead of joining the bullish sentiment.
According to crypto company leader Samson Mow, the current situation appears to show coins moving from impatient sellers to long-term holders.
"Bitfinex whales are buying heavily from weak hands," he noted, referring to the selling pressure from weak hands and the stable buying from large accounts.
Counter-trend signal, but not a timing tool
The Bitfinex whale long metric has been closely monitored as a potential leading indicator in technical analysis for a long time. Its interpretation, however, requires nuance.
These traders have a proven tendency to increase long exposure during declines and reduce their positions during strength. Thus, elevated long positions often follow rather than precede price rallies.
Van Straten noted that the true value of the signal lies in tracking reversals, not just observing levels.
"In the short term, when the trend reverses," he reiterated, meaning that the decrease of these longs could be more informative than their total at the current moment.
Not everyone agrees on the reliability of the indicator. Analyst Parabear Nick questions overly confident interpretations of whale data and dismisses some highly bullish narratives altogether amid claims that whale accumulation alone guarantees higher prices.
History supports a more balanced view. Whale long positions have reached extremes at various stages in previous cycles, and they can remain high for months before a significant price movement.
This suggests that while the metric provides insights into positioning and sentiment, it should be evaluated alongside other indicators such as open interest, funding rates, and macro-level liquidity.
The current accumulation phase coincides with a decline in open interest in derivatives markets, indicating reduced participation from retail investors and short-term traders.
In this context, the concentration of leverage among whales is emphasized. With fewer speculative players, large investors have a greater impact on marginal price movements.
The timing remains unclear, however. Elevated whale longs indicate expectations of higher prices but may not necessarily signal an immediate breakout.
A decisive turning point will be seen at the moment when these positions begin to unwind. Previously, such changes have also foreshadowed shifts in market conditions.
