Even as the market experiences a decline, Bitcoin whales have been steadily accumulating large amounts of the cryptocurrency. Data from CryptoQuant reveals that BTC holdings have surged by $22.8 billion in the last month.
Significant Whale Accumulation Amid Market Decline
On-chain data indicates that over the past 30 days, more than 404,448 BTC, valued at approximately $22.8 billion, have been moved to long-term holder addresses. CryptoQuant’s founder and CEO, Ki Young Ju, pointed out this significant increase in long-term BTC demand.
Ki Young Ju noted in late July that Bitcoin is in a clear accumulation phase, with 358,000 BTC transferred to permanent addresses during the month. Additionally, global spot ETF inflows added another 53,000 BTC in July. He stated, “Although not all remaining BTC is in custody wallets, whales are clearly accumulating. And it’s an unprecedented level.”
He also speculated that major entities, such as financial institutions, corporations, or governments, might announce substantial Bitcoin purchases by Q3 2024. Ki warned retail investors they might regret not buying Bitcoin during this period of market uncertainty, which includes fears of significant sell-offs by the German government and the Mt. Gox trustee, alongside broader macroeconomic concerns.
Positive Market Signals
Ki highlighted several bullish factors currently influencing the market. The recovery in hashrate suggests that miner capitulation is nearing its end, with the metric approaching all-time highs. The cost of mining one BTC in the U.S. is about $43,000, suggesting that the hashrate should remain stable unless Bitcoin prices fall below this threshold.
Additionally, retail investor activity remains low, resembling the market conditions of mid-2020. Between March and June, older whales sold their holdings to new whales, reducing significant selling pressure from long-term holders.
Bearish Considerations
Despite these positive signs, Ki identified some bearish factors. Macro risks could lead to forced sell-offs, as evidenced by large crypto deposits from Jump Trading and a year-to-date high in daily deposits on Binance. Some on-chain indicators have turned bearish, although they are currently borderline. If these bearish trends persist for over two weeks, the market recovery could face challenges.
Ki concluded with cautious optimism, stating that he believes the bull market remains intact based on the current data. However, he indicated that if the market does not recover within two weeks, he would reassess the situation. He emphasized that his analysis follows “smart money,” suggesting that if his assessment proves incorrect, it could mean that the new whales either misjudged the situation or underestimated the macroeconomic environment.
