Bitcoin (BTC) needs more demand to hit new all-time highs as whale accumulation slows significantly, new research suggests.
In its latest weekly report seen by Cointelegraph, on-chain analytics firm CryptoQuant said that “most” demand indicators are currently showing bearishness.
Bitcoin Whales Have Abandoned FOMO
Bitcoin is still not a strong enough buying target to attract enough investment to push it to its all-time high.
According to CryptoQuant, large BTC investors (aka whales) have slowed down their pace of accumulating coins since the most recent all-time high in March.
“The 30-day percentage change in whale holdings has decreased from 6% in February (the fastest pace since February 2019) to just 1% today,” the report said.
“Historically, when monthly growth in whale holdings exceeds 3%, the Bitcoin price has been shown to rise, but that is not currently the case.”
If whales can’t provide the firepower needed to drive BTC prices higher, a US spot Bitcoin exchange-traded fund (ETF) is currently an unreliable alternative.
Daily net inflows into spot ETF products are a fraction of the March total, with the daily average last week being 1,300 BTC.
CryptoQuant added that “a recovery in spot ETF buying would be essential to boost overall Bitcoin demand, potentially leading to a corresponding increase in price.”
The exception to the “summer slump” that the market is facing comes in the form of “permanent holders” – entities that only buy BTC and never sell it.
Unlike the whales, this group has shown no hesitation in increasing their BTC exposure.
“Despite slow growth in overall Bitcoin demand, permanent holders continue to accumulate Bitcoin at unprecedented levels,” the report said.
“The total balance of these holders is growing at a record monthly rate of 391K bitcoins. Permanent holder demand is growing much faster than in Q1 2024, when the bitcoin price was above $70,000.”
BTC Speculators Suffer Unrealized Losses
The recent price volatility may be the reason for the growing concern among speculative investors.
Related: Back to $50K? 5 Things to Know About Bitcoin This Week
According to Cointelegraph, most recent buyers have been left underwater after hitting six-month lows in early August.
According to data from BGeometrics, the cost base for that cohort is still $63,000, above the spot price.
According to data from Cointelegraph Markets Pro and TradingView, at the time of writing on August 20, BTC/USD was trading around $59,000, recovering 2.5% gains from the previous day.
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