Bitcoin Whales Engage in Accumulation Spree, Says CryptoQuant
Bitcoin’s value dropping below $60,000 has spurred large investors, known as whales, to accumulate the digital currency in anticipation of a price surge. Analysts at CryptoQuant revealed that Bitcoin (BTC) whales and long-term holders have been increasing their holdings at a rate of 6.3% per month, indicating a growing demand for the cryptocurrency despite the overall market downturn. Currently, BTC is more than 21% lower than its peak price of $73,373 reached in March, presenting an opportunity for savvy investors to take advantage of the lower prices.
The data from the blockchain analytics firm shows that this accumulation spree is the swiftest since April 2023 when Bitcoin was trading around $30,000. The report, released recently, also pointed out that whale activity has been supporting BTC’s price amid selling pressure that has emerged over the past couple of weeks.
The market saw an influx of new Bitcoin supply after authorities in Germany and the U.S. transferred thousands of tokens to centralized exchanges like Coinbase and Kraken. Additionally, BTC experienced a decline following the announcement by the defunct exchange Mt. Gox regarding customer repayments, a decade after one of the largest crypto hacks in history.
CryptoQuant highlighted key on-chain indicators that could potentially lead to a Bitcoin price rally. The firm noted that Bitcoin whales have been less inclined to sell off their assets since the price dropped below $60,000. The price range between $56,000 and $59,000 might indicate an early bottom, suggesting a possible turnaround in the market sentiment. However, the extent of any rally from this local bottom hinges on improved liquidity associated with stablecoin minting.
According to CryptoQuant, Bitcoin typically experiences price increases when stablecoins, particularly Tether’s USDT, witness a surge in token minting. However, the market capitalization of USDT has been stagnant in recent weeks, raising uncertainties about when stablecoins like USDT will resume regular minting activities. This process involves creating new fiat-pegged coins to enhance crypto liquidity levels.
In conclusion, despite the current market fluctuations and challenges, Bitcoin whales and long-term holders are strategically accumulating the digital asset in anticipation of a potential price uptrend. The dynamics of the market, especially concerning stablecoin activity, will play a crucial role in determining Bitcoin’s future price movements.
