Bitcoin Whales Accumulate BTC During Dip as Market Structure Remains Robust

In July, Bitcoin saw a noticeable shift in market behavior, with larger investors accumulating more BTC while smaller traders sold off during the dip.

Highlighting a shift in market behavior during July, larger investors appeared to be accumulating more Bitcoin ( BTC ) while smaller traders sold off their holdings amid the price dip. According to Santiment, there has been a net increase of 261 wallets that now hold at least 10 BTC, indicating long-term confidence despite recent market turbulence.

This development aligns with the broader market trend, as Bitcoin experienced its deepest correction since late 2022, falling below the 200-day moving average (DMA). Glassnode’s report highlights unique characteristics in the 2023-24 Bitcoin cycle compared to previous cycles.

Following an 18-month steady price rise post-FTX collapse, Bitcoin saw three months of sideways trading after a $73k ETF peak. The market experienced its deepest correction between May and July, with a 26% drawdown from the all-time high (ATH). However, this downturn is less severe than in past cycles, suggesting a robust underlying market structure.

When examining Bitcoin's current cycle in the context of previous cycles, such as 2018-21 and 2015-17, it provides a valuable framework for analysis. However, when indexing to the Bitcoin halving date, the current cycle underperforms despite reaching a new cyclical ATH before the April halving, a first in Bitcoin's history.

Analyzing the number of daily drawdowns exceeding 1 standard deviation in an uptrend shows the current cycle has recorded only six such events, suggesting either a shorter, less volatile cycle or potential for further growth. The volume of supply held by short-term holders surged since January 2024, driven by the spot ETFs launch, but has plateaued recently, indicating a shift towards a supply overhang.

Recent Drop to $53k Puts Over 2.8M Bitcoin in Loss

Significant sell-offs, such as the recent drop to $53k, have pushed the volume of coins held at a loss to over 2.8 million BTC, a level only seen once before in the past year. The current correction has seen 20 days where over 2 million short-term holder coins were underwater, compared to 70 days during the severe Q2-Q3 2021 stress period.

The ratio of realized profit to loss has decreased to a range between 0.50 and 0.75, which is normal for bull market corrections. However, there are rapid shifts in this measure that show investor instability beneath it.

This week alone, short-term holders suffered losses of around $595 million, the biggest since the low point of the 2022 cycle. These losses are severe, yet typical when compared with previous bull market corrections.

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