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Bitcoin Whales Increase Accumulation Amid Market Decline
In the past month, Bitcoin whales have been notably amassing large quantities of the cryptocurrency as the market experiences a downturn. Recent on-chain data indicates that over 404,448 BTC, which is around $22.8 billion, have been transferred to permanent holder addresses within the last 30 days.
Insights on Whale Accumulation
Ki Young Ju, the founder and CEO of CryptoQuant, shared observations on August 6 regarding this trend, suggesting that there are significant developments occurring behind the scenes. He pointed out an uptick in the demand for permanent BTC holders over the past month, noting that in late July, a total of 358,000 BTC was shifted to such addresses. Furthermore, he mentioned that global spot ETF inflows contributed an additional 53,000 BTC during July.
Ki emphasized, “While not all BTC is held in custody wallets, it is evident that whales are accumulating at an unprecedented pace.” He also forecasted that within a year, we might witness major acquisitions of Bitcoin by traditional financial institutions, corporations, or government entities, particularly in the third quarter of 2024.
Advice for Retail Investors
He cautioned retail investors that they might later regret not taking advantage of the current market uncertainty, which is marked by apprehensions about potential large-scale sell-offs by the German government and the Mt. Gox trustee, as well as broader macroeconomic issues.
Positive Market Signals
In another update, Ki pointed out several positive indicators that bolster the current market scenario. The recovery of the hashrate suggests that miner capitulation may be nearing an end, with metrics approaching historical highs. The cost to mine Bitcoin in the U.S. is approximately $43,000 per BTC, indicating stability in the hashrate unless prices fall below this level.
Additionally, retail participation is notably low, reminiscent of the market conditions seen in mid-2020. During the period from March to June, older whales liquidated their assets to newer whales, alleviating some selling pressure from long-term holders.
Bearish Considerations
However, Ki also pointed out some bearish elements that could affect the market. Macro risks might trigger forced sell-offs, as shown by significant crypto deposits from Jump Trading and a peak in daily deposits on Binance this year. Some on-chain indicators have turned slightly bearish, and if these trends persist for more than two weeks, the path to market recovery could be obstructed.
Concluding Thoughts
Ki wrapped up with a cautiously optimistic view, asserting that, based on the current data, he believes the bull market remains intact. He stated that if the market does not show signs of recovery in the next two weeks, he would reevaluate the situation. Ki mentioned that he keeps track of “smart money,” and if his analysis proves incorrect, it could signify that new whales misjudged the circumstances or underestimated the macroeconomic landscape.
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