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Following Donald Trump's inauguration on January 20, bitcoin (btc) has remained range-bound, trading between $101,000 and $110,000. However, a new report from CryptoQuant claims that behind this routine price action, bitcoin “whales” are quietly returning to hoarding the leading cryptocurrency.
bitcoin whales return to accumulation mode
According to the reportLarge btc holders, commonly known as bitcoin 'whales', have re-entered the accumulation phase. Recent data shows a significant increase in the monthly percentage growth of btc holdings among these large investors.
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Notably, bitcoin whale holdings rose from a -0.25% drop on January 14 to 2% growth on January 17, marking the highest monthly growth rate since mid-December. In absolute terms, these investors' btc holdings increased from 16.2 million on November 4 to 16.4 million as of January 24.
The surge in whale accumulation appears to be driven by several bullish developments at the start of the Trump administration. For example, the president of the United States has already signed an executive order establishing a Working Group on Digital Asset Markets.
This working group has been tasked with proposing a federal regulatory framework for cryptocurrencies, including stablecoins, within six months. Additionally, the group will evaluate the possible creation of a national reserve of digital assets, which will fuel speculation about a possible strategic reserve of bitcoin in the United States.
In addition to the growth in whale holdings, btc selling pressure has dropped sharply since the major profit-taking in December. This aligns with a recent report which found that btc profit taking has fallen 93% from its December peak. The report says:
bitcoin holders made daily profits of up to $10 billion as bitcoin approached $100,000 in December. However, daily realized profits have fallen to levels of around $2 billion to $3 billion in January, indicating that market participants may have mostly finished selling bitcoin. Additionally, traders' unrealized profit margins have dropped to near zero, a level that typically marks a price floor during bull markets.
However, the report also highlights that overall spot demand for bitcoin has weakened over the past month, raising concerns about the likelihood of another bullish rally. Specifically, the growth rate of bitcoin demand has fallen from 279,000 btc in early December to just 75,000 btc at the time of writing.
Analysts confident of another btc rally
Despite cooling on-chain demand, crypto analysts remain optimistic about another major price rally for bitcoin. For example, a recent report suggested that btc could target a price of up to $249,000 during the Trump presidency.
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Other report Bitfinex predicted that btc will likely head towards $200,000 by mid-year amid mild price pullbacks. However, much depends on how the US Federal Reserve handles interest rate adjustments this year.
From a technical point of view, the btc cup and handle pattern projects a price target of up to $275,000. At press time, btc is trading at $106,074, up 0.1% in the last 24 hours.
Featured image from Unsplash, chart from TradingView.com
