Key Points
- Bitcoin’s exchange reserve dropped significantly in February, indicating a shift towards long-term holding.
- The number of unique entities holding at least 1k Bitcoins increased by nearly 4% over the past month.
Bitcoin’s exchange reserve witnessed a steady decrease throughout February. This coincided with a 44% spike in its market price during the same period.
A decline in exchange supply usually indicates reduced selling pressure and a potential shift towards other activities, such as becoming long-term holders.
Bitcoin Scarcity and Whale Entities
As more Bitcoins were accumulated and stored in self-custodial and cold wallets, it led to a scarcity in the market. This scarcity, according to supply-demand dynamics, signalled a major bullish trend.
The broader hoarding mentality was also reflected in the sharp increase in the number of institutional investors or ‘whale entities’.
There was a nearly 4% increase in the number of unique entities holding at least 1k Bitcoins in February, compared to the previous month.
ETFs and Bitcoin Price Predictions
The introduction of several exchange-traded funds (ETFs) linked to Bitcoin’s spot price opened the crypto market to traditional finance investors in the U.S.
This development led to bullish forecasts, with some research suggesting that Bitcoin could reach $100,000 by the end of the year and nearly $200,000 by the end of 2025.
These optimistic predictions likely motivated whale investors to accumulate more Bitcoins.
Over the past week, Bitcoin’s price surged to as high as $64k, raising hopes of a recovery to its all-time high. As of this writing, profit-taking has pulled Bitcoin’s price down to $61.8k.
Despite the slight dip, the asset was still about 20% higher on a weekly basis, according to CoinMarketCap.
Currently, Bitcoin’s Fear and Greed Index indicates a state of “Extreme Greed”, suggesting a fair degree of FOMO among market participants, which could lead to further upsides in the coming days.
