TL;DR
- Whale Accumulation: During the recent dip below $50,000, Bitcoin whales rapidly accumulated BTC, with transactions reaching their highest levels since early April.
- Significant Holdings: Long-term Bitcoin holders increased their holdings by 404,000 BTC (over $23 billion) in the last month, despite ETF outflows.
- Market Dynamics: The supply of Bitcoin on centralized exchanges hit a multi-year low, indicating a trend towards self-custody and a low intention to sell.
The recent dip in Bitcoin’s value below the $50,000 mark on August 5 and 6 sent ripples of anxiety through the market. However, while many investors were gripped by panic, seasoned market players saw this as an opportunity. According to on-chain data, Bitcoin whales transactions reached their highest levels since early April during this period.
As per a recent post by Santiment, wallets with holdings between 10 and 1,000 BTC “rapidly accumulated” when the price dropped to as low as $48,800. Santiment further reveals that during this downtrend period, Bitcoin saw 5,738 transactions worth over $1 million and 28,319 transactions worth over $100,000.
🐳 August 5th and 6th saw the highest level of Bitcoin whale transactions since the first week of April. According to the total holdings of wallets with 10 to 1,000 BTC, they rapidly accumulated on the price dip that saw crypto's top asset fall below $50K. pic.twitter.com/wLG33tIV2k
— Santiment (@santimentfeed) August 7, 2024
In addition, the surge in Bitcoin accumulation extended beyond a mere few days. Throughout the last month, addresses belonging to long-term Bitcoin holders have boosted their holdings by an impressive 404,000 BTC, which translates to more than $23 billion.
This total reflects 40,000 BTC gathered via spot Bitcoin ETFs. However, it is important to note that the accumulation through ETFs did not happen during the latest dip, as these investment funds saw an aggregate outflow of $554 million between August 2 and 6.
Expert Analysis of Bitcoin Whales
CryptoQuant CEO Ki Young Ju finds these figures as a clear sign of massive accumulation during this prolonged correction period. Moreover, there is no major selling pressure from older Bitcoin whales—those who have held BTC for over three years, as they sold their holdings to new whales between March and June.
In the meantime, CryptoQuant’s data indicates that the supply of Bitcoin on centralized exchanges has reached its lowest point in several years. Notably, whales holding more than 1,000 BTC have been pulling their assets from these exchanges at the fastest pace seen since 2015.
This trend towards self-custody suggests a low intention to sell, indicating that more long-term investors are interested in the largest cryptocurrency.
What’s Next for Bitcoin?
Following the recent significant decline, Bitcoin has found its footing, trading steadily between $55,000 and $57,000. Moreover, its market cap has seen a resurgence, increasing from $951 billion on August 5 to $1.12 trillion as of today. In a positive turn, US spot ETFs ended a three-day outflow period by registering an inflow of $45.14 million on August 7.
Even with the recent recovery, Arthur Hayes, co-founder of BitMEX, warns that the cryptocurrency market may face another downturn in the future. Furthermore, the Ethereum sell-off by Jump Trading on Wednesday could lead to increased selling pressure.
“The absence of ETF buyers during this dip and the persistent liquidation pressure from various players remain a significant concern,” Market research firm 10x Research notes.
At the time of writing, Bitcoin (BTC), continues to recover from the recent crash, trading at around the $57,500 mark, increasing nearly 1% in the last 24 hours, according to data from CoinMarketCap.
Bitcoin’s Market Dynamics
Analysts focus on essential metrics that have consistently been deemed vital for Bitcoin. Among these is the Market Value to Realized Value (MVRV) ratio, which provides valuable insights into the market’s profitability.
An increase in the ratio indicates that Bitcoin holders are experiencing significant unrealized gains, which implies a greater likelihood of them selling. Conversely, a decline in the ratio points to diminishing profits, leading to a reduced probability of holders deciding to sell.
