Since the inauguration of the U.S. president, the trajectory of Bitcoin’s spot demand has experienced a noticeable slowdown. This shift is significant given that a robust demand for Bitcoin (BTC) is essential for triggering a substantial rise in its market price. Recent findings from CryptoQuant reveal that although the demand for Bitcoin is not showing signs of robust growth, significant players in the cryptocurrency space, often referred to as “whales,” are engaged in a reaccumulation strategy. These large holders are taking advantage of the market conditions to bolster their BTC reserves despite the overall demand slump.
The apparent demand for Bitcoin continues to be positive but has diminished significantly. For example, the growth rate dropped sharply from a striking 279,000 BTC in early December 2024 to just 75,000 BTC currently. This decline extends to the demand momentum, which plummeted from a peak of 1.7 million to a mere 0.1 million BTC in the same timeframe. Such metrics indicate a prevailing stagnation that could dampen prospects for a price rally on the horizon, necessitating a renewed vigor in demand metrics to instigate upward price movement.
Interestingly, there was a notable increase in demand from large investors immediately preceding the presidential inauguration. From January 14 to January 17, the acquisitions by these major players surged, with their BTC holdings experiencing a percentage increase from -0.25% to +2%. This marked a significant rebound and reflected the highest monthly increase since mid-December. The trend is particularly relevant in the backdrop of the U.S. presidential election, where large investors have emerged as critical drivers of both demand and price dynamics in the Bitcoin market.
The dichotomy between the behaviors of large and small investors has become quite pronounced. While sizable market participants have increased their Bitcoin holdings from 16.2 million BTC to 16.4 million BTC between November 4 and January 24, small investors experienced the opposite trend, seeing their total holdings decrease from 1.75 million BTC to 1.69 million BTC. This polarization highlights a capital shift in the market where larger investors appear to be capitalizing on lower prices, contrasting sharply with the sentiment of smaller investors.
The pressure from sales has diminished significantly in light of the profit-taking phase that transpired during Bitcoin’s previous surge. At one point, daily realized profits reached an astonishing $10 billion when BTC was nearing the $100,000 mark in December. However, this figure has since subsided to between $2 billion and $3 billion, signaling a tapering off of selling activities among traders. Coupled with the decreasing unrealized profit margins, these elements suggest the formation of a new price floor, as articulated by CryptoQuant. Their observations point to an environment where selling profits have diminished, thereby lessening downward pressure on Bitcoin’s price.
While the overall demand for Bitcoin appears muted in the wake of recent geopolitical events, the large investors are maneuvering strategically to position themselves advantageously. The divergence between large and small investors, alongside the shifting profit dynamics, could play a pivotal role in shaping the future of Bitcoin’s valuation in the cryptocurrency market.
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