Bitcoin has been experiencing a notable divergence in trading patterns between large holders, often referred to as “whales,” and retail investors. A recent analysis by the sentiment platform Santiment highlights that since October 12, Bitcoin whales—wallets holding between 10 to 10,000 BTC—have sold approximately 32,500 BTC. This activity has coincided with aggressive purchasing from smaller retail wallets, signaling a distinct split in investor behavior.
During this period of whale selling, Bitcoin’s price fell significantly from $115,000 to around $98,000 by November 4, marking a decline of approximately 15%. However, Bitcoin has since seen a recovery, currently hovering between $102,000 and $103,000. Despite this rebound, the cryptocurrency remains nearly 20% below its all-time high of $126,000, which it achieved on October 6.
Market analysts suggest that various factors contributed to this downturn. One key reason is that early adopters have begun to liquidate significant portions of their holdings. According to research from Compass Point analyst Ed Engel, net sales from long-term holders have surpassed 1 million BTC since late June. Additionally, a massive liquidation of leveraged crypto positions on October 10 put substantial pressure on Bitcoin’s market value, with the cryptocurrency struggling to maintain support levels after breaching critical thresholds of $117,000 and $112,000.
Markus Thielen, an analyst at 10X Research, has characterized Bitcoin’s current situation as indicative of a bear market. The firm had predicted that Bitcoin would fall to $100,000, and Thielen suggests the market may be “a few weeks away” from hitting a more favorable buying point. He noted the potential for further correction, warning that there is an “air pocket” beneath $93,000, which could lead to even lower prices around the $70,000 mark.
The dollar’s recent strength has also posed challenges to the cryptocurrency market, with a continued rally possibly presenting additional headwinds for Bitcoin.
Contrasting opinions exist among analysts regarding the near-term outlook for Bitcoin. While some express bearish sentiments, Bitfinex analysts foresee a period of consolidation and volatility instead of an immediate climb toward new highs. They suggest that the initial surge in Bitcoin’s price in early October was fueled by ETF inflows before being interrupted by macroeconomic shocks and profit-taking strategies.
On November 7, U.S. Bitcoin spot ETFs experienced significant net outflows, totaling $558 million, with all twelve Bitcoin ETFs recording outflows. This trend continued until November 7, when spot Bitcoin ETFs halted a six-day outflow streak that resulted in $2.04 billion being pulled from the market. In contrast, Ethereum spot ETFs suffered net outflows of $46.6 million during this timeframe.
Despite these challenges, Bitfinex analysts remain hopeful about a potential rise in Bitcoin’s price, projecting that it could reach $130,000 if certain conditions are met, such as weekly spot Bitcoin ETF inflows increasing above $1 billion and improved macroeconomic conditions.
Jake Kennis from Nansen expressed a cautious optimism, acknowledging that while Bitcoin has historically posted yearly gains, recent market breakdowns make short-term growth less certain. However, he noted that there remains potential for significant upside into the year-end if market momentum shifts positively.
In a more optimistic assessment, JPMorgan indicated that the recent deleveraging episode that negatively impacted Bitcoin during October appears to be largely behind us. According to JPMorgan managing director Nikolaos Panigirtzoglou, rising volatility in gold has made Bitcoin more appealing to investors, with the possibility of Bitcoin prices climbing to as high as $170,000 over the next 6-12 months.
Looking forward, several factors could influence Bitcoin prices, including the potential for a Federal Reserve rate cut in December, which might offer support. Furthermore, a reopening of the U.S. government could facilitate fresh liquidity from government spending flowing into market assets.
