Bitcoin (BTC) has decreased by 30% from its peak of $126,200, currently trading just above the $85,000 support level, raising concerns about a potential slide toward the $70,000 area. However, onchain data reveals that institutions and high-net-worth individuals are actively accumulating BTC.
Key takeaways:
Bitcoin sharks have been accumulating at a rate reminiscent of 2012, indicating a dip-buying trend.
Substantial selling from long-term and OG whales continues to limit upside potential, keeping near-term downside risks heightened.
Mid-sized Bitcoin traders add 54,000 BTC in a week
Entities holding between 100 and 1,000 BTC, termed “Bitcoin sharks,” have increased their collective holdings from approximately 3.521 million BTC to about 3.575 million BTC in the last week, absorbing around 54,000 BTC from smaller holders, as per Glassnode.
This marks the fastest rate of shark accumulation since 2012, indicating strong bullish sentiment among wealthier individuals and institutional participants despite BTC’s 30% decline.
Related: Bitcoin anticipated to reach a new all-time high within 6 months: Grayscale
A similar accumulation surge occurred in 2012, which preceded one of Bitcoin’s most significant rallies, with BTC rising to over $100 from around $10 within a year, yielding a nearly 900% increase.
A similar trend was noticeable in 2011 when significant accumulation by mid-sized holders followed Bitcoin’s 350% surging past $14 from below $3.
If this historical pattern repeats, it could favor further upward movement.
Bitcoin faces sell pressure from long-term holders
Whales possessing over 10,000 BTC have been a major factor in the recent sell-off, emphasizing that shark buying power has not been enough.
This discrepancy corresponds with Capriole Investments’ evaluation that unprecedented institutional buying has encountered equally extraordinary selling from long-term holders.
Founder Charles Edwards noted in a Tuesday comment:
“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).”
Edwards added that the appreciation in price may be constrained until the heavy distribution from older coins diminishes.
To further complicate the outlook, seasoned trader Peter Brandt pointed out Bitcoin’s recent drop below its parabolic support, a movement historically leading to price declines of around 80%. In this scenario, BTC could fall to as low as $25,000 if the fractal were to repeat.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
