Bitcoin (BTC) has declined 30% from its peak of $126,200, currently trading just above the $85,000 support level, raising concerns of a potential decline towards the $70,000 area. Nevertheless, onchain data indicates that institutions and high-net-worth individuals are accumulating BTC.
Key takeaways:
Bitcoin sharks have been accumulating at a pace reminiscent of 2012, indicating a trend of buying during dips.
Persistent selling by long-term and OG whales continues to limit upside potential, keeping near-term downside risks high.
Mid-sized Bitcoin traders add 54,000 BTC in a week
Bitcoin “sharks,” which are entities holding between 100 and 1,000 BTC, increased their total holdings to roughly 3.575 million BTC from 3.521 million BTC in the past week, absorbing 54,000 BTC from smaller holders, according to Glassnode.
This accumulation marked the quickest rate for sharks since 2012, indicating strong bullish sentiment among high-net-worth individuals and institutional investors despite BTC’s 30% retracement.
Related: Bitcoin to hit new all-time high within 6 months: Grayscale
In 2012, a similar surge in Bitcoin accumulation preceded one of its earliest significant price rallies, where BTC rose above $100 from around $10 within a year, representing a 900% increase.
A similar trend was observed in 2011, where aggressive accumulation by mid-sized holders followed Bitcoin’s 350% climb to over $14 from below $3.
A repeat of this historical pattern could indicate further upward movement.
Bitcoin faces sell pressure from long-term holders
Whales possessing over 10,000 BTC have been a key factor in the recent sell-off, showing that the buying strength from sharks was inadequate.
This discrepancy aligns with Capriole Investments’ view that record levels of institutional buying are being matched by equally historic distributions from long-term holders.
Founder Charles Edwards noted in a Tuesday post:
“While institutional buying on Coinbase has reached unprecedented levels (Z-score 15.7), it is being absorbed by ‘OG’ whales and long-term holders selling at rates not seen in years (Hodler Growth Rate at 0.6th percentile).”
The potential for price growth may be limited until the significant distribution from older coins diminishes, he cautioned.
Adding to the bearish outlook, veteran trader Peter Brandt pointed out Bitcoin’s recent drop below its parabolic support, a move that has historically resulted in declines of around 80%. This implies that BTC’s price could potentially drop to as low as $25,000 if the pattern recurs.
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This article does not offer investment advice or recommendations. All investments and trading actions carry risks, and readers should conduct their own investigations before making decisions. Although we aim to provide accurate and timely information, Cointelegraph cannot guarantee the accuracy, completeness, or reliability of any content in this article. It may contain forward-looking statements that involve risks and uncertainties. Cointelegraph is not liable for any losses or damages arising from reliance on this information.
