Bitcoin Whales Increase Holdings by Only 1% Monthly

August 22, 2024 09:20 PM AEST | By Team Kalkine Media

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Bitcoin Whales Increase Holdings by Only 1% Monthly — Image source: Shutterstock

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Recent data indicates that large-volume Bitcoin holders, commonly referred to as whales, have significantly reduced their rate of accumulation since the peak in March when Bitcoin reached its all-time high. Onchain analytics firm CryptoQuant highlights in its latest weekly report that current demand metrics for Bitcoin show signs of weakness.

According to CryptoQuant, the pace at which these major Bitcoin holders are acquiring additional coins has slowed dramatically. The 30-day percentage change in whale holdings has dropped from 6% in February—its fastest pace since early 2019—to just 1% at present. This slowdown in whale activity suggests that Bitcoin may lack the necessary momentum to push its price to new highs without increased buying pressure from these large players.

In addition, the current performance of U.S. spot Bitcoin (BTC) exchange-traded funds (ETFs) is not providing the boost needed. Daily net inflows to these ETFs have diminished significantly from their March levels, with recent averages around 1,300 BTC. A resurgence in spot ETF purchases could be crucial for driving overall Bitcoin demand higher and potentially sparking a price rally.

However, a notable exception to the general trend is observed among "permanent holders"—entities that accumulate Bitcoin without selling. This group has continued to increase their holdings at unprecedented rates despite the overall slowdown in Bitcoin demand. Their ongoing accumulation contrasts sharply with the cautious stance of larger investors.

Recent price action may be contributing to the hesitancy among speculative traders. As of August 20, Bitcoin’s price was approximately $59,000, having retraced 2.5% from overnight gains. This recent price movement reflects the broader market’s current challenges and may be influencing the cautious approach of some investors.

Overall, while permanent holders remain active, the reduced accumulation by whales and the lower spot ETF inflows suggest a need for renewed demand to drive Bitcoin towards new highs.

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