Bitcoin Reaches a High of $112,000: Sleeping Whale Wallets Activate with Minimal Retail Participation
In a recent statement, Kushal Manupati, Regional Growth & Ops Lead of South Asia at Binance, highlighted that the current Bitcoin rally is not purely retail-driven, with long-term holders playing a significant role. This shift in market dynamics has nuanced implications for the crypto market, particularly regarding overheating and profit-taking.
Long-term Bitcoin holders, those who have held BTC for at least 155 days or several years, have reached historic levels, controlling about 74% of the supply. This deep conviction in Bitcoin’s store-of-value narrative, despite fading bullish momentum earlier in the year, has coincided with a trend of accumulation rather than distribution or panic selling.
The BTC price has traded mostly above $100,000 with occasional dips, and the rally has not seen deep corrections beyond 25%. This market stability, coupled with high price levels, has reduced the urgency for holders to sell under pressure.
Movement of "ancient supply" (coins held for 5+ or 10+ years) has increased, although not all of this movement signals selling. Some may be transfers between wallets without immediate sell pressure. The HODL rate has turned positive, indicating more coins entering ancient supply, reflecting strong long-term holding behavior.
Institutional activity also contributes to this strategic accumulation. Publicly traded companies continue to accumulate Bitcoin, borrowing capital to increase their BTC holdings. This institutional confidence supports the trend of long-term accumulation and reduces the incentive for wholesale selling.
The increased holding and accumulation by long-term investors dampen short-term sell pressure that might otherwise accelerate during rallies. This could mitigate the risk of abrupt market overheating driven by frantic profit-taking. However, the potential for selective selling by long-term holders and speculative pressures from derivatives markets still pose risks for increased volatility in the event of a sentiment shift.
As Bitcoin reaches a fresh all-time high of $112,000, the focus will shift to whether the number of holders on the Bitcoin network begins to rise, indicating renewed retail interest. The activation of old coins adds uncertainty as investors assess the possibility of market overheating and potential profit-taking amid the current rally. These rare, aged transactions have sparked speculation about early miners or recovered wallets.
While the potential for FOMO (Fear of Missing Out) may emerge as the market responds to this fresh Bitcoin milestone, the strategic accumulation of long-term holders appears to moderate market volatility, shifting the Bitcoin market from speculative bursts towards a more stable store-of-value dynamic.
[1] https://www.blockchain.com/charts/market-cap-dominance [2] https://coinmetrics.io/data/bitcoin-spent-output-age-btc [3] https://glassnode.com/research/bitcoin-hodler-net-position-change [4] https://www.glassnode.com/charts/btc-derivatives-inventory
- Institutional investors, such as publicly traded companies, are significantly contributing to the ongoing trend of strategic Bitcoin accumulation, borrowing capital to increase their BTC holdings.
- The increased movement of ancient Bitcoin supply (coins held for 5+ or 10+ years) may not necessarily signal selling, with some transactions likely transfers between wallets without immediate sell pressure, thereby reducing sell pressure in the market.
- The accumulation of Bitcoin by long-term holders and the shift in market dynamics towards a more stable store-of-value dynamic are helping to alleviate short-term sell pressure, potentially mitigating the risk of abrupt market overheating during the current rally.
