Bitrabo Editorial
The latest report from CryptoQuant, an on-chain data provider, indicates a concerning trend in the Bitcoin (BTC) market. The report highlights a slowdown in whale accumulation, which refers to large-scale investors amassing Bitcoin holdings.
Typically, Bitcoin whales have a significant impact on the market, with their accumulation signaling confidence and often resulting in price increases. However, the current decrease in whale accumulation suggests a more cautious approach from these influential players, hinting at potential future price decreases for Bitcoin.
Indications of a Bearish Market
CryptoQuant’s report shows a drop in the monthly growth rate of whale holdings, from 6% in February to 1%. Historically, a growth rate of over 3% in whale holdings has been associated with rising BTC prices. Therefore, this decline is seen as a bearish signal for Bitcoin’s future pricing.
Additionally, the report discusses the concept of “apparent demand” for BTC, which has seen a significant decline since early April. The drop in apparent demand has coincided with a noticeable decrease in Bitcoin’s price, from $70,000 to $49,000 by August 5.
To see a recovery in Bitcoin’s price, there needs to be a resurgence in apparent demand, according to CryptoQuant. Without this uptick in demand, Bitcoin may struggle to reach its previous price highs and could face continued downward pressure in the market.
Examining Bitcoin’s Market Premium
The report also points out the declining price premium for BTC trading on Coinbase, which has dropped from 0.25% to 0.01%. This reduction in the Coinbase premium is seen as another indication of weakening demand for Bitcoin in the US market.
Overall, the analysis suggests a bearish outlook for Bitcoin, with declining whale accumulation and weakening apparent demand posing challenges for the cryptocurrency’s future performance.