Bitcoin’s recent momentum has been quite challenging. Over the past several weeks, Bitcoin’s price has shown persistent declines, dropping by 22.3% in the last month, bringing its value to $83,191 at the time of writing. This decline underscores ongoing uncertainty in the broader cryptocurrency market, where investors are grappling with reduced risk appetites and the lack of solid bullish catalysts. Despite this downward trend, there is emerging confidence among certain investors.
According to exhibited whale addresses—wallets holding between 1,000 and 10,000 Bitcoin—these entities have demonstrated a historical correlation with Bitcoin’s price trends. As reported by CryptoQuant contributor Mignolet, the current market cycle exhibits characteristics similar to the prominent bull cycle of 2020. During bearish periods, whales accumulated Bitcoin among themselves, and the market follows a similaratisation pattern.
Mignolet emphasized that this cycle performed three times in 2020, each time following bearish conditions, with limited daily price drops. In the present phase, similar accumulation behavior is observed among these whales, particularly among those holding Bitcoin in the range of 1,000 to 10,000 BTC. Mignolet argues that whales are not Drifting out of their positions despite the market pressure. The significance of whale behavior lies in its historical_force in driving the market direction.
Furthermore, the price movement of short-term holders (STHs) has also shown signs of capitulation. Another CryptoQuant analyst, Darkfost, noted that the Short-Term Holder Spent Output Profit Ratio (SOPR) has been hovering around 0.98 for over two months, below the 1.0 threshold. This indicates that certain holders are selling Bitcoin at a loss, a common sign of emotional distress among short-term holders.
STH capitulation is further evidenced by the evidence of Bitcoin being sent to exchanges at a loss. Recent data shows approximately 46,000 Bitcoin have been sold at a loss in the past week, a trend that is often preceded by market bottoms. Historical patterns suggest that such heavy capitulations often precede market troughs, as shorter-term investors exit positions and longer-term holders capitalize on the discounts.
The image credit is provided by DALL-E, and a chart from TradingView highlights the volatility in the market. This summary captures the key points of Bitcoin’s current state, with a focus on theosciars and holders exhibiting diversified behaviors.
