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Following Donald Trump’s inauguration on January 20th, Bitcoin (BTC) has remained range-bound, trading between $101,000 to $110,000. However, a new report by CryptoQuant states that behind this routine price action, Bitcoin ‘whales’ are quietly back to accumulating the premier cryptocurrency.
Bitcoin Whales Back In Accumulation Mode
According to the report, large BTC holders – commonly referred to as Bitcoin ‘whales’ – have re-entered the accumulation phase. Recent data shows a significant uptick in the monthly percentage growth of BTC holdings among these large investors.
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Notably, Bitcoin whale holdings increased from a decline of -0.25% on January 14 to a growth of 2% by January 17, marking the highest monthly growth rate since mid-December. In absolute terms, these investors’ BTC holdings rose 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 early in Trump’s administration. For example, the US president 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 potential creation of a national digital asset stockpile, fueling speculation about a potential US strategic Bitcoin reserve.
Besides growth in whale holdings, selling pressure for BTC has declined sharply since major profit-taking in December. This aligns with a recent report which found that BTC profit-taking has dropped by 93% from its December peak. The report reads:
Bitcoin holders realized daily profits as high as $10 billion as Bitcoin approached $100K in December. However, daily realized profits have fallen to levels around $2-$3 billion in January, which indicates market participants may have finished selling Bitcoin for the most part. Moreover, the traders’ unrealized profit margins have declined near zero, a level which typically marks a price floor during bull markets.
However, the report also highlights that overall Bitcoin spot demand has weakened over the past month, raising concerns about the likelihood of another bullish rally. Specifically, the rate of demand growth for Bitcoin 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 the cooling of on-chain demand, crypto analysts remain optimistic about another major price rally for Bitcoin. For instance, a recent report suggested that BTC could target a price as high as $249,000 during Trump’s presidency.
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Another report by Bitfinex predicted that BTC is likely headed to $200,000 by mid-year amid mild price pullbacks. However, a lot depends on how the US Federal Reserve handles interest rate adjustments this year.
From a technical standpoint, BTC’s cup-and-handle pattern projects a price target of as high as $275,000. At press time, BTC trades at $106,074, up 0.1% in the past 24 hours.
Featured image from Unsplash, Chart from TradingView.com
