According to on-chain data provider CryptoQuant, a declining monthly growth rate in Bitcoin whale holdings is a bearish indicator for the digital asset’s price.
CryptoQuant’s weekly report shows that the 30-day percentage change in whale holdings has decreased from 6% in February to the current growth rate of 1%.
The report said the decline in appetite among large Bitcoin holders was a bearish market indicator. “Historically, when whale holdings grew by more than 3% per month, this was associated with higher Bitcoin prices, but this is no longer the case,” CryptoQuant analysts said.
Monthly growth in total whale holdings has decreased from 6% in February to 1% today. Image: CryptoQuant.
Overall Bitcoin demand falls into negative territory
This report focuses on one of CryptoQuant’s metrics, apparent demand, which is the difference between the daily total Bitcoin block grant and the daily change in the number of Bitcoins that have not moved in over a year.
“Overall Bitcoin demand has slowed significantly since early April, when the digital asset was trading at $70,000. Demand has declined from its highest 30-day increase since January 2021 at 496,000 bitcoins to a current negative growth of 25,000,” the report said.
CryptoQuant analysts pointed to data showing that Bitcoin prices fell from around $70,000 in early June to $49,000 on August 5 as demand slowed. “For prices to recover, we will need to see demand pick up again,” the analysts added.
The CryptoQuant report added that the decline in demand is also evident in the lower price premium for Bitcoin on Coinbase.
“In early 2024, the price premium for Bitcoin trades on Coinbase reached 0.25%, which coincided with strong demand for Bitcoin and larger buys from exchange-traded funds, as seen in the previous chart. However, the premium has been trending downward since then, and is currently at 0.01%, indicating weakening demand for Bitcoin in the US,” the CryptoQuant analyst said.
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