Recent data from the cryptocurrency analytics firm CryptoQuant reveals a significant trend among major Bitcoin holders. The balances of “whales”—individuals or entities possessing between 1,000 and 10,000 BTC—have been on the decline over the past year. This selling activity mirrors patterns observed during the previous major crypto bear market in 2022.
The firm’s analysis highlights that the change in whale balances has remained negative for one year, indicating a distribution trend akin to that seen when whale growth started to stall and eventually turn negative during the last bear market. In 2022, Bitcoin’s price fluctuated dramatically, reaching a peak of $47,450 in March before plummeting to as low as $15,742 by November—a staggering decline of nearly 67%. Presently, Bitcoin has only fallen about 42% from its October 2022 all-time high of $126,080.
CryptoQuant further notes that the accumulation of Bitcoin by “dolphins”—those holding between 100 and 1,000 BTC—has also slowed. Both groups, the whales and dolphins, are failing to increase their Bitcoin holdings, a situation the firm warns could lead to “sustained price weakness.” These large holders typically provide the primary demand support for Bitcoin markets, and their stagnation is seen as a concerning sign.
Counterbalancing this trend, the number of Bitcoin held by long-term holders has reached new heights, totaling 15.8 million BTC. However, analysts describe this increase as paradoxical, viewing it as a “bearish configuration” that indicates a lack of new participants entering the market. They suspect that this rise in long-term holdings occurs when Bitcoin does not change hands frequently enough, leading to an insufficient short-term demand to offset selling pressure from long-term holders.
As of now, Bitcoin is trading around $73,536, reflecting a 1.7% decline in the last 24 hours and nearly a 5% drop over the week. With these losses, trader sentiment has turned increasingly pessimistic regarding Bitcoin’s short-term prospects. Predictions on Myriad, a market prediction platform, suggest that the likelihood of Bitcoin trading below $70,000 by the end of May is increasing. This downward sentiment aligns with the observations made by CryptoQuant, marking a potential period of heightened uncertainty for Bitcoin and its investors.
