Bitcoin Supply Reaches Seven-Year Low Amid Whale Profit-Taking
Bitcoin is experiencing a significant supply squeeze, with exchange balances dropping to a seven-year low. Whales have realized nearly $800 million in profits, hinting at potential market volatility. Despite selling pressure, strong demand keeps Bitcoin above $95,000, suggesting upward price potential.
The Bitcoin (BTC) market is currently witnessing a significant supply squeeze, characterized by a seven-year low in exchange balances and continued accumulation by long-term holders. Additionally, whales have realized close to $800 million in profits, which may indicate potential volatility in the upcoming periods.
Market analyst Ali reports that Bitcoin whales have cashed out approximately $799.668 million, marking one of the most substantial profit-taking events recently. On February 4, 2025, Bitcoin’s price hovered around $97,788, coinciding with this spike in realized profits. Historically, such profit-taking by significant holders often leads to short-term price corrections; however, Bitcoin has uniquely maintained a price above $95,000 due to robust buying demand.
The analysis of Bitcoin’s exchange supply indicates that the amount of BTC available on exchanges is at its lowest level since 2018. This decrease suggests that fewer Bitcoins are available for active trading, which can lead to a bullish market trend. A continued outflow from exchanges indicates that more investors are choosing to hold their coins rather than sell, thus easing selling pressure and promoting price stability.
Moreover, trading through Over-the-Counter (OTC) desks has also decreased, with reserves dropping to a maximum of 300,000 BTC. This trend highlights that institutional and high-net-worth investors are likely holding onto their investments rather than engaging in high-volume trades. As a result, this reduced availability on the market indicates a further tightening of Bitcoin’s supply.
Long-term holders (LTHs) continue to accumulate Bitcoin while short-term holders (STHs) are selling due to market volatility. Historical data indicates that substantial accumulation by larger investors often precedes significant price rallies. The current decrease in exchange supply, coupled with whale accumulation, suggests a bullish environment for Bitcoin’s long-term price action.
On recent trading charts, Bitcoin has broken out of a falling wedge, which is a bullish signal. However, resistance was encountered in the $97,500 to $98,000 range, leading to a slight price retracement to $95,788. The Relative Strength Index (RSI) at 39.76 suggests building bearish pressure, indicating that if buying interest does not increase, Bitcoin prices could potentially decline further.
In conclusion, despite potential short-term volatility driven by whale activity, underlying fundamentals such as decreased supply and steady accumulation hint at a promising outlook for Bitcoin. Should BTC maintain its price above $95,000, there is optimism for further upward momentum towards the $100,000 mark and beyond.
In summary, the supply of Bitcoin currently reflects a seven-year low, bolstered by whale profit-taking and continued accumulation by long-term holders. These trends suggest a robust demand, mitigating selling pressure. Although some volatility may be observed due to significant whale actions, the potential for Bitcoin’s price to regain momentum and reach higher levels remains strong, contingent upon the maintenance of key price thresholds.
Original Source: www.thecoinrepublic.com
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