Key Points
- Bitcoin whale activity has increased significantly, reaching its highest since January 2021.
- Retail Bitcoin investors have slowed their accumulation as Bitcoin nears the $70,000 mark.
The latest price action for Bitcoin is characterized by an increase in activity among Bitcoin whales. These large holders, controlling a minimum of 1,000 BTC, have grown in number to its highest since January 2021.
Data from Glassnode, shared by André Dragosch, head of research for Europe at Bitwise, reveals that the number of these investors climbed to 1,678 earlier this week. This increase in accumulation by large-scale holders indicates growing optimism in Bitcoin’s price potential.
Role of Whales in Bitcoin Value
Whales, defined as network entities controlling clusters of wallets holding at least 1,000 BTC, significantly influence BTC price due to their capacity to impact liquidity and price. An increase in whale accumulation is seen as a sign of confidence in Bitcoin’s long-term value, even as prices approach historic highs.
While whale activity has been on the rise, retail investors, those with smaller holdings, appear to be more cautious. According to CryptoQuant data, retail Bitcoin accumulation has slowed as the cryptocurrency nears the $70,000 mark.
Over the past month, retail holdings have only grown by 1,000 BTC, marking a historically slow pace of accumulation. On the other hand, larger investors, especially those holding between 1,000 and 10,000 BTC, have continued to accumulate at a faster rate.
Market Sentiment Divergence
Since the start of the year, these larger investors have added 173,000 BTC to their holdings, compared to just 30,000 BTC for retail investors. This trend indicates a growing divide in market sentiment. Smaller investors are more hesitant to buy at high prices, whereas larger investors are betting on further price appreciation.
After briefly surpassing $69,000 on Monday, Bitcoin has settled around $67,350, just 10% below its all-time high of $73,800. Thursday saw a minor price dip to $65,400, mainly due to a strengthening US dollar index and rising Treasury yields, impacting high-risk assets like Bitcoin.
Despite these fluctuations, Bitcoin’s performance has been solid compared to previous months, with its value rising by 6% over the past 30 days. The steady inflow of capital into US spot Bitcoin ETFs indicates growing interest from institutional investors.
On Wednesday, US spot Bitcoin ETFs recorded a net cash inflow of $190 million, led by Blackrock’s iShares Bitcoin Trust (IBIT). Furthermore, the recent surge in stablecoin supply on exchanges suggests more buying pressure may be on the way, likely from institutional investors.
